Pakistan, Qatar sign 10-year LNG supply contract.

Byline: Khaleeq Kiani

ISLAMABAD -- Pakistan and Qatar have signed another long-term Liquefied Natural Gas (LNG) supply contract for additional 200 million cubic feet a day (MMCFD) at around 31 per cent lower rate than the 2015 contract for 500MMCFD.

The 10-year agreement signed on Friday entailed the 'lowest-ever publicly disclosed price under a long-term contract in the world' and was achieved through joint efforts of the political and military leaderships, said Special Assistant to the Prime Minister on Petroleum Nadeem Babar while speaking at a news conference after the signing ceremony.

The Pakistan Tehreek-i-Insaf government had at the outset of its term tried to renegotiate the long-term contracts with Qatar signed by the Pakistan Muslim League-Nawaz government in 2015-16 with similar assertions that it had secured the lowest long-term price and no major LNG purchasers - much larger than Pakistan - had until then got such a price.

Qatar had plainly declined even to discuss the existing contract, saying it had dozens of similar long-term contracts with other countries and did not want to set a precedent, but had offered to provide 20-25pc price discounts for the additional 200MMCFD LNG supplies considering the close friendly relations between the two countries.

However, the offer did not materialise then, as Pakistan did not have a capacity beyond 100MMCFD additional quantities at the time and also due to a disagreement within the cabinet for political reasons.

PM's aide says political, military efforts behind the lowest-ever publicly disclosed price in the world

Mr Babar told the presser that the supply under new Qatar deal would replace demand of the two existing and expiring long-term deals.

Under the new agreement, which will be effective from January 2022, Qatar will initially deliver two ships (containing a total of around 200MMCFD of LNG) a month. Later, the supplies will be enhanced up to four ships (400MMCFD) at the rate of 10.2pc of Brent.

In contrast, the first Pak-Qatar LNG contract had been signed for 15 years, beginning with 100MMCFD (one ship each month) and later going up to 500MMCFD (five ships a month) at the rate of 13.37pc of Brent.

The new contract has a price renegotiation option after four years rather than 10 years that had been fixed in the previously signed contract.

The PM's aide said the total spot purchases as of December 2020 averaged at 11.90pc of Brent compared to 13.37pc of Brent in initial three...