ISLAMABAD: Special Assistant to Prime Minister (SAPM) on Petroleum NadeemBabar said on Friday that Pakistan would save an amount of around $3billion in the import of Liquefied Natural Gas (LNG) under a 10-yearagreement signed with Qatar at 10.2pc of the Brent, which would beeffective from January 2022.
“Today we have signed a very important agreement with Qatar. Our earlieragreement [signed by the PML-N government] with Qatar was of 13.37pc of theBrent, under which an average five cargoes arrive every month. But, we [thePTI government] gave inked the deal at 10.2pc of the Brent,” he said whilesharing with media details of the agreement, which was signed in thepresence of Prime Minister Imran Khan at the PM House.
This contract, he said, was “almost 31pc lower” as compared to the previousagreement signed by the Pakistan Muslim League-Nawaz (PML-N) government.
“It is a 10-year agreement and the price can be renegotiated after a periodof four years,” he informed, adding that the existing agreement was of 15years, under which the price was fixed for a period of 10 years.Article continues after this advertisement
Under the new agreement, he said, Pakistan would save around $317 millionannually and $3 billion collectively in 10 years.
Nadeem Babar said there were a number of amendments in the 10-yearagreement. As per the old contract, Pakistan had given a letter of credit(LC) of $170 million to the Qatari government, but under the new agreement,the LC would be only of $84 million.
In the new arrangement, he said, import would be started with average twoships per month, which would be increased to four vessels in a period ofthree years.
Justifying the new deal, he said a contract of the Gunvor Company, whichwas operating at 13.37pc of the Brent, had expired in December 2020, whileits second contract would be ending after 14 months.
Read Top Stories
The new contract, he said, would be replacing the two expensive contracts[of Gunvor].
The SAPM said there would be a cushion for Pakistan to import additionalvolume of LNG during the upcoming peak winter season, on need basis, at thesame 10.2pc of the Brent.
“This agreement will be effective from next January, and if needed it canbe executed two-three months before the commencement date, keeping in viewthe winter needs.”
He termed the new LNG supply deal ‘historic’ as it would ensure economicstability. “In the LNG trade, this price [10.2pc of the Brent] is thelowest publicly disclosed contract ever,” the SAPM claimed.
Answering a question, he said the process to strike this deal had startedaround two years ago, when he had accompanied the PM during his first visitto Qatar. “It is correct that the deal was discussed at the highest levelof the government. The PM himself had talked to the Amir of Qatar thrice.It took long time to strike the deal at 10.2pc of the Brent, which is thelowest publicly known contract in the world today.”
