Pakistan has signed an agreement with Qatar on the import of Liquefied Natural Gas (LNG) and the first shipment of 200mmcfd is expected to reach by the end of March 2015; however, the terms of the agreement have not yet been made public. Minister of Petroleum while talking to media on 13 March 2015 had maintained that imported LNG would help reduce the cost of power generation and had added that the first shipment was scheduled to arrive at Karachi on 26th March.
According to him, the LNG import price will be submitted before the Economic Co-ordination Committee (ECC) for approval. Business Recorder was told by a senior official of the Ministry of Petroleum that he was unaware of the LNG import price agreed with Qatar and added that only a handful of senior officials are aware of the final price. He also expressed his ignorance about the timing of the submission of the LNG import price to the ECC for approval.
The official revealed that the ECC had approved a price negotiating team in response to a summary proposed by the Petroleum Ministry some eight months ago. Pakistan State Oil Company Limited (PSOCL) and Qatargas Operating Company Limited (QOCL) have been nominated by their respective governments to negotiate/draft Heads of Agreement (HOA) for import of LNG. The ministry had also constituted a team comprising PSO, SNGPL, SSGCL and ISGSL to negotiate the technical and operational aspects of heads of agreement with the decision that the LNG price is to be negotiated after finalising operational and commercial terms.
The Committee was assigned to negotiate an LNG price formula, payables for the LNG to be supplied by Qatargas under Sale Purchase Agreement (GSA) as a single source supplier on the basis of the government to government commitment. The committee was also to negotiate bench marketing criterion, price review mechanism, and payment mechanism as well as to review price trend in the international market and region and comparison of LNG price with other alternate fuels available for supply and technical suitability.