LNG deal with Qatar
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After inordinate indifference and aloofness impassively stretching over the years without any apparent reasons, Pakistan and Qatar have finally warmed up their relations by signing up multi-billion dollar liquefied natural gas deal. The $16 billion deal covers the import of LNG from Qatar for 16 years to meet domestic energy requirements. The presence of the top brass of Pakistan and Qatar on the occasion of the signing ceremony indicates that cooperation between the two countries in various other sectors is also expected. Qatar is one of the biggest per capital income countries in the world and has started mega development projects. So far India and the Philippines are the largest labour suppliers in Qatar having around one million people of each country working in the tiny oil and gas-rich country. Though Pakistan should itself create vast opportunities for its labour force, it will not be unusual if Pakistani labour gets job opportunities in Qatar.
Petroleum Minister Shahid Khaqan Abbasi has termed the deal a game changer as Pakistan will import 3.75 million tonnes LNG annually. The import will help meet 20 percent energy needs of the country until 2032. Abbasi claims the deal will save the country $1 billion annually and another $600 million will be saved in diesel costs for power generators. It took the government almost two and half years to negotiate and finalize the deal, paving the way for the state-owned PSO to import up to 500 mmcfd on ex-ship (DES) basis. According to the agreement, the cost of gas is estimated at $4.78 per mmbtu for March, lower than the current rate of $5.35 mmbtu.Pakistan and Qatar have also signed three other agreements, including cooperation in radio, television, health and academic research activities. Prime Minister Nawaz Sharif has invited the Qatari businessmen to explore investment opportunities in Pakistan in oil and gas as well as the power generation sectors and other fields of economy.
Qatar is a small country with rich natural resources and its leadership wants to boost business and investment activities at local and foreign levels. Millions of foreign expatriates are working in Qatar sending billions of dollars foreign exchange to their respective countries. Pakistan can invite the Qatari businessmen to invest in industrial sector where there are vast opportunities for joint ventures. Qatar has the money and Pakistan has the skill and both the countries can work together in the best interest of their peoples. It will also be plausible if Gwadar and Doha are declared sister cities and it will be good omen to launch development projects in the two cities simultaneously.
Thursday, February 11, 2016 - Doha—Pakistan and Qatar on Wednesday inked multi-billion dollar Liquified Natural Gas (LNG) deal that would enable the energy-starved country to import natural gas for 16 years and to meet its energyrequirements.
The historic signing ceremony of $16 billion LNG sale and purchase deal was held here between Ministry of Petroleum andNatural Resources of Pakistan and Qatar Petroleum.
The agreement was jointly signed by Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi and Chairman of Qatar Gas Board of Directors Saad Sherida Al-Kaabi at a ceremony in Diwan-e-Emiri in Doha, according to which the kingdom will provide a billion dollars’ worth of LNG to Pakistan annually.
Qatar Liquefied Gas Company Limited will sell LNG from 2016 to year 2031 to Pakistan State Oil (PSO).
The annual contract quantity for 2016 has been agreed at a prorate of 2.25 metric tonne while the price for each cargo has been agreed at 13.37 per cent of Brent.
Abbasi later told media that the import price of LNG from Qatar was the best available rate, adding that Pakistan will get at least thirty-five million tonnes of LNG to help rid the energy crisis.
“The import of gas will also help start production of at least 2,000 megawatts of electricity from power houses that are currently non-operational,” said the minister.
Prime Minister Nawaz Sharif and Amir of Qatar Sheikh Tamim bin Hamad bin Khalifa Al-Thani also witnessed the signing ceremony.
Talking to media at the signing ceremony here Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi said that the LNG deal with Qatar, which was the biggest gas producer in the world, was a game changer for Pakistan.
He said under the agreement 3.75 million of ton LNG would be imported annually from Qatar on government-to-government basis on comparative rates, adding that it would meet less than 20 percent energy requirements of Pakistan.
He said the deal would help improve performance of closed 2000 MW generation units and three fertilizer plants besides mitigating sufferings of domestic consumers and CNG sector.
The Minister said it would save the country one billion dollars annually besides $600 million would be saved under the head of diesel cost. He expressed the hope that the present government during its tenure would steer the country out of theenergy crisis.
According to documents of Ministry of Petroleum and Natural Resources, the procurement price from Qatar is the lowest compared to the prices it offered at various points in the past.
The LNG price for the Mashal Project was $6.94 per mmbtu, Integrated Project $6.01 per mmbtu, while Qatar’s initial offer was $6.56 per mmbtu, which was brought down after negotiations and estimated cost for the month of March is $4.78 per mmbtu.
The gas would also be cheaper compared with Iran Pakistan Pipeline and Turkmenistan-Afghanistan-Pakistan-India pipeline project. The IP border rate is $5.70 per mmbtu, while TAPI border rate is $5.90 per mmbtu, while Qatar’s current rate is $5.35 per mmbtu. The price will be based on last three months brent average.
Meanwhile, Pakistan and Qatar signed four Memorandum of Understanding including a long term LNG Sales and PurchaseAgreement, cooperation in the fields of Radio and Television, Health and Academic Research activities.
The first MoU about cooperation between the two countries in radio and television was signed by Special Assistant to the PM on Foreign Affairs Syed Tariq Fatemi and Foreign Minister of Qatar Muhammad bin Abdurrehman Al-Thani.
The MoU on cooperation between the two countries in health sector was signed by Finance Minister Mohammad Ishaq Dar and Qatari Health Minister Hanan Muhammad Alkwari.
While a Memorandum of Understanding in Academic Research and Cooperation Activities between the two countries was signed by Pakistan Ambassador to Qatar Shahzad Ahmed and Commander of Strategic Studies in Qatar Armed Forces Staff Major General Saud Ali Alnaeemi.
Prime Minister Nawaz Sharif on Wednesday said Pakistan is an ideal destination for investors and called upon the Qatar Investment Authority to explore the opportunities in Pakistan’s oil and gas sector.
The Prime Minister expressed these views in a meeting with Emir of Qatar Sheikh Tamim bin Hamad Al Thani held here at the Aiwan-e-Emiri.
Prime Minister Sharif said Pakistan and Qatar enjoy strong fraternal relations. He said Pakistan has huge manpower and Qatar could benefit by utilizing the services of more Pakistanis.
He said the trade and investment in all fields between the two countries must be increased. The Emir of Qatar thanked Prime Minister Sharif for visiting Qatar.
He termed Qatar as second home for all Pakistanis and appreciated the role of Pakistanis in transforming and developing Qatar. The two sides also held delegation-level talks.—Agencies
But but Qatar LNG is expensive Dr Shahid Masood is Credible
Please Ask Shahid Masood to give stats that Any other country is buying LNG on less then $5.35.....
