Qatar Petroleum entered into a new long-term supply deal with Pakistan State Oil Company (PSO) for the supply of up to an additional 3 million tonnes per annum of cargoes with prices almost one-third lower than in the previous accord.
Under the 10-year agreement, LNG deliveries to Pakistan's receiving terminals will commence in 2022 and continue until the end of 2031.
The accord was signed in Islamabad between Saad Sherida Al-Kaabi, President and Chief Executive of Qatar Petroleum, and Syed Taha, Head of PSO, in the presence of Pakistani Prime Minister Imran Khan and Saoud bin Abdulrahman Al Thani, Qatar's Ambassador to Pakistan.
PM Khan’s Special Assistant on Petroleum Policy, Nadeem Babar, told a later press conference that the volumes in the new Qatari contract will be about 30 percent less expensive than previously.
“It is the lowest publicly disclosed LNG contract in terms of price in the world,” added Babar.
Babar explained that the deal would help the country save a total of up to US$3 billion over 10 years.
“The previous agreement with Qatar was for 15 years under which the price was fixed for 10 years. The new agreement, however, envisages price reopening after four years,” said Babar.
Qatar and PSO signed a previous agreement in 2016 for 3.75 MTPA of LNG and the new deal raises the total of long-term LNG volumes to 6.75 MTPA.
Babar added that under the new agreement, Pakistan would receive two LNG shipments on average per month and after a period of three years, the number of cargoes would increase to four.
“We are delighted to enter into this new long-term agreement with Pakistan State Oil Company and to continue our contributions towards meeting Pakistan's increasing energy demand,” stated the Qatar Petroleum CEO.
“This agreement further extends Qatar's long-standing LNG supply relationship with Pakistan and highlights our commitment to meeting Pakistan's LNG requirements,” he added.
“We are confident that the exceptional reliability of our LNG supplies will provide PSO with the required flexibility and supply security to fuel Pakistan's impressive growth,” said Al-Kaabi.
Pakistan currently has two operational floating LNG receiving terminals, the Engro LNG facility and the Pakistan GasPort terminal.
Both use floating storage and regasification units (FSRUs) and are located at Port Qasim, east of the city of Karachi.
In further comments, Al-Kaabi noted that Pakistan had a well-established gas market and distribution system and was strategically important for Qatar.
“We are encouraged by Pakistan's exceptional growth and excellent economic potential as well as by the prospects of it being one of the world's fastest growing LNG markets,” added Al-Kaabi.
“I would like to take this opportunity to thank Prime Minister Imran Khan for his support and for his patronage of this special event. I also would like to thank Pakistan's energy officials as well as PSO's management for all their efforts,” stated Al-Kaabi.