Contract with Qatar- Govt considering renegotiating LNG import

govt-considering-15-year-lng-import-contract-qatar
Govt considering renegotiating LNG import contract with Qatar

Building on its continuous criticism of LNG  import and processing terminals, the government is considering renegotiating the 15-year LNG import contract with Qatar.

Pakistan Tehreek-e-Insaf (PTI) has been criticizing the contract signed by the previous Pakistan Muslim League-Nawaz (PML-N) government with the Qatar government.

The prices in the contract:

These contracts were signed for import of LNG from Qatar at a price equivalent to 13.39 % of international benchmark crude oil price and two terminals set up by the private sector for re-gasifying imported LNG.

On Friday, at a news conference, the Petroleum Minister Ghulam Sarwar Khan said,

“The price of LNG imported from Qatar is the most expensive”

.He also said that the prices under proposed gas pipelines from Turkmenistan and Iran were cheaper.

He further said that the government was looking into the agreement from both aspects; being expensive and non-disclosure.

Also Check: LNG Deals To Be Declared Non-Transparent – CCP

At a news conference, the Petroleum Minister Ghulam Sarwar Khan said,

“The price of LNG imported from Qatar is the most expensive”.

More from the minister:

He also said that the prices under proposed gas pipelines from Turkmenistan and Iran were cheaper.

He further said that the government was looking into the agreement from both aspects; being expensive and non-disclosure.

Responding to a question, he said he would not speak about its specific terms because the issue could land in the International Court of Arbitration (ICA).

“I am bound under the contract to keep its specifics secret otherwise they would involve the ICA,” he said, adding that “an in-camera briefing will be given to Prime Minister Imran Khan in a few days for a decision.”

The minister said the petroleum division also had some reservations over the agreements on terminals and some of them were in courts and, therefore, he would opt not to prejudice the issue.

The on-going investigations of the contract:

He said the Supreme Court, National Accountability Bureau (NAB) and Federal Investi­gation Agency (FIA) were looking into the contracts.

All deals related to import of LNG from Qatar and two LNG terminals in Karachi and those found responsible for signing the expensive deals would be held accountable.

The petroleum minister had last month announced sending three LNG contracts to NAB for investigation and renegotiating the contract with terminal operations to bring down processing charges.

The Terminal Operators’ say:

The terminal operators said the agreement could not be reopened. NAB had been probing the LNG deals even when the PML-N was in power and comprehensively grilled various officials involved but never took it to the next level of filing a reference in a court.

Former prime minister Shahid Khaqan Abbasi has always defended the LNG import.  Saying that the processing terminal contracts were transparent and in the best national interest.

He has been challenging the PTI ministers for an open debate.

govt-considering-15-year-lng-import-contract-with-qatar
Govt considering renegotiating LNG import contract with Qatar

The upcoming changes:

The petroleum minister also announced at the news conference that all politically motivated board of directors of oil and gas companies would be reconstituted. It will happen in the next 100 days

The step will be taken to ensure transparency in the appointment of heads of these companies. Adding that the government had already reconstituted boards of directors of six companies.

The election for chairmen:

He said the boards would also elect their own professional chairmen while chief executive officers would be appointed after clearance from NAB and the FIA.

Mr. Khan claimed that the previous government had not auctioned a single block for oil and gas exploration during its five-year tenure. Whereas the PTI government selected 40 blocks and auctioned 10 of them to exploration companies.

Letters to provinces:

He said the federal government had written letters to the provinces, asking them to give the names of their representatives for boards of directors of oil and gas companies.

The role of Exxon Mobil:

The minister said Exxon Mobil would start offshore drilling 230 kilometers from Karachi in January next year for which a rig was on its way. OGDCL, PPL, ENI, and ExxonMobil have 25pc shares each in this offshore block.

He said that work on two refineries in Balochistan was at an advanced stage.

Parco was setting up a refinery and another one would be established by the UAE in Balochistan for which 2,000 acres of land had been allocated, he said, adding that the UAE crown price would soon visit Pakistan and sign an agreement in this regard.

Source: Dawn

Conclusion:

Renegotiations with Qatar on LNG will be better for Pakistan in the long run. The previous government did not reveal the credentials of the contract. No one was informed on what exactly Pakistan has to pay back.

The deals looked shady as the PMLN Govt has been hiding the details of the MoU’s with Qatar.

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