Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed Al Nahyan may announce a $3.2 billion credit oil facility during his upcoming visit in support of Pakistan's balance of payment. This was the crux of several interviews with relevant officials by this correspondent who however acknowledged that so far there has been no agreement on the matter though there is considerable optimism that Pakistan will be able to secure total annual oil and LNG deferred payment facility of about $ 7.2 billion from Saudi Arabia, UAE and International Islamic Trade Finance Corporation (ITFC) in support of our balance of payment crisis.
The Abu Dhabi crown price will arrive in Islamabad on January 6 to formally engage with Prime Minister Imran Khan. During this visit, Pakistan authorities say that negotiations with UAE would mature and the Crown Prince may announce US$3.2 billion credit oil facility for Pakistan on the same pattern as has been extended by Saudi Arabia.
The United Arab Emirates (UAE) has already announced its decision to park $3 billion in State Bank of Pakistan to shore up the reserves. Saudi Arabia has already deposited $2 billion in SBP with US$1 billion still to be deposited.
A senior government official said the credit oil facility of $3.2 billion was in addition to supporting the balance of payment crisis and added that total UAE support to Pakistan would reach $6.2 billion.
UAE also intends to invest billions of dollars in new projects of Pak Arab Refinery Limited (Parco) that is a joint venture between Pakistan and Abu Dhabi. Parco is expected to set up new coastal oil refinery with an investment of around over $5 billion.
Pakistan also hopes to secure $1.2 billion credit facility for LNG imports from ITFC. The total oil import bill of Pakistan amounts to $12.5 billion and Pakistan has arranged to defer $6.4 billion for these imports, and if Qatar agrees to defer LNG payments then a total of $9 billion oil bill would be deferred, an official said.
Pakistan is currently importing 8 LNG cargoes per month. Out of these, Pakistan imports 5 LNG cargoes from Qatar and 3 LNG cargoes from Gunvor and ENI. The total annual LNG import bill amounts to $ 4.2 billion to $4.5 billion.
Officials said that ITFC would provide $1.2 billion credit facility for LNG imports; and reports indicate that Pakistan is negotiating procuring LNG from Qatar on deferred payment to further ease the current foreign reserve pressure.
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