LNG deal.

PAKISTAN has clinched a good deal for the long-term supply of LNG from Qatar. Under the new contract, Qatar will provide an additional 200mmcfd at around 10.2pc of Brent for 10 years starting next year. The expected reduction in port charges by Doha would further push down the price to 10.13pc of Brent.

The government says the new bargain entails the lowest-ever publicly disclosed price under a long-term contract in the world, which is 31pc less than the 15-year contract signed by the previous administration. This is almost the same price at which Qatar is supplying LNG to China. The new price is also 15pc-16pc less than the average spot purchases of 11.9pc of Brent in 2020.

The current rate has been locked for the first four years of the life of the contract after which it can be renegotiated. The monthly supply of the two cargos will replace the demand of an expiring and two existing long-term, but more expensive, contracts. Islamabad also has the option to shift its summer demand to winter without any changes in the agreed gas price.

The debate on the gas sector during the last two years has mostly focused on the price of imported gas at the expense of much-needed reforms. Now that the PTI government has proved that the 2015 deal with Doha has cost the country quite a bit, it's time to move on to address the real challenges facing the gas market and overhaul it.

With indigenous gas reserves depleting fast because of decades of inefficient use, Pakistan's increasing reliance on imported LNG to meet demand has exposed many fault lines in this sector. The situation calls...