Affordable LNG: PM to ink pact during Qatar visit tomorrow

The government is pursuing import of LNG to minimise the supply gap and meet energy needs

ISLAMABAD: Prime Minister Nawaz Sharif will leave for Qatar on Wednesday, aiming at signing an agreement for importing cheap Liquefied Natural Gas (LNG).

Pakistan is currently facing a severe shortage of natural gas, both for its electricity generation and industrial use. The supply-demand gap is approximately 2-4 BCFD (billion cubic feet per day). The government, therefore, is pursuing import of LNG to minimise the supply gap.

In a meeting on January 13, Economic Coordination Committee (ECC) of the federal cabinet approved recommendations made by LNG price negotiation committee (PNC) regarding the price and key commercial terms of the long term sales purchase agreement (SPA).



PNC had earlier held a series of meeting with Qatargas to finalise the price and key commercial terms of the agreement.

The ECC also allowed Pakistan State Oil (PSO) as buyer to execute the long term LNG SPA with Qatargas as seller, pursuant to a government-level agreement as per due process.

It was the ECC that formed the PNC in August 2014 comprising representatives of the petroleum, finance, water and power, Sui Northern Gas Pipelines Ltd. (SNGPL), Sui Southern Gas Company Ltd. (SSGCL), PSO and Inter State Gas Systems Limited (ISGSL).

In July 2013, the ECC authorised petroleum ministry to negotiate with Qatargas to import up to 500 mmcfd on delivered ex ship (DES) basis. Subsequently, an agreement relating to energy sector cooperation was signed between the two governments.