Pakistan Close to Deal With Qatar Over LNG for Power Plants

[Edevelop]

Pakistan is close to striking a long-term deal worth potentially $22.5 billion or more to import liquefied natural gas to help fuel the country’s power stations and ease its crippling electricity crisis, Pakistan’s top energy official said.

“We are negotiating with Qatar and a few other sources,” said Pakistani Petroleum Minister Shahid Khaqan Abbasi in an interview with The Wall Street Journal. “The deal will be very competitive and very beneficial for Pakistan.”

An agreement with Qatar is expected by early March, Pakistani officials say.

Pakistani Prime Minister Nawaz Sharif came to office in May 2013 on a pledge to reduce the country’s electricity shortages, which see power regularly cut to homes and businesses for eight or more hours a day. Tackling the electricity deficit, however, has thus far largely eluded Mr. Sharif’s government.

The government has promised to eradicate the electricity shutdowns, known as load shedding, by the time of the next polls in 2018. Ministers say the government’s record on electricity is key to its re-election prospects.

The deal with Qatar would provide supplies over 15 years, Pakistani officials say. Pakistan is looking to import 3 million tons of LNG a year, beginning this year, with much or all of that coming from Qatar.

Pakistan Close to Deal With Qatar Over LNG for Power Plants - Frontier Markets News - Emerging & Growth Markets - WSJ

 

[Zibago]

Correction Saifurehman close to deal with Qatar

 

[Edevelop]

Consumers to receive LNG from March 31

ISLAMABAD: The Bin Qasim Liquefied Natural Gas (LNG) terminal will start supply of imported gas to consumers by March 31, a senior government official said.

The official told this correspondent on condition of anonymity that agreement for LNG purchase from Qatar, Malaysia, Brunei and China is expected by March. He said the price of LNG will be less than $8 per mmbtu in Asia which will bring down the cost of power production from the IPPs by up to 20 percent.

The official said Pakistan will make an agreement for LNG import for five to 15 years. Pakistan will purchase about three million tons LNG per year which will cost $1.5 billion according to current estimates. This will save Rs300 million for Pakistan. The import of LNG will enhance transmission in the system by 400 million cubic feet, while the terminal has the capacity to further enhance the transmission by 49 percent.

The under construction terminal will have more capacity than Sui field. Bin Qasim terminal has been completed in the record time of 11 months and it will convert LNG to natural gas on lowest rates.

The official said the LNG terminal will help reduce electricity loadshedding and enhance supply to the CNG stations. Prime Minister Nawaz Sharif will inaugurate the LNG terminal in last week of March.


Consumers to receive LNG from March 31 - thenews.com.pk

 

[Viper0011.]

Correction Saifurehman close to deal with Qatar

Ok...what difference does it make who is cutting the deal? At the end, the long term deal would help the entire economy of Pakistan (long term planning, that no other government previously cared to do for your country). Mentality like yours is why Pakistan remains to be a mess. If you guys learn to play as a team and a nation together, you'd always appreciate good things that anyone's doing for Pakistan. Do you see this behavior from the Indians too??? There is a reason why they are where they are........and its due to all Indians working together for India. Not for their respective politicians or family's political affiliation.

 

[Zibago]

Ok...what difference does it make who is cutting the deal? At the end, the long term deal would help the entire economy of Pakistan (long term planning, that no other government previously cared to do for your country). Mentality like yours is why Pakistan remains to be a mess. If you guys learn to play as a team and a nation together, you'd always appreciate good things that anyone's doing for Pakistan. Do you see this behavior from the Indians too??? There is a reason why there are where they are........and its due to all Indians working together for India. Not their respective politicians or family's political affiliation.

So by your logic the N gov should be given a free hand to BLESS their big dogs with these lucrative deals

 

[black-hawk_101]

It was far better for Pakistan to make up a deal with Qatar and KSA for a possible pipelines for refined natural gas (Methane) from Qatar and refined oil pipelines from KSA. Which will help Pakistan to get these resources without bearing the cost of Transportation through Gwadar port.

Even they would be able to spread the network from Pakistan to China and India too.

 

[I FLY HIGH]

It was far better for Pakistan to make up a deal with Qatar and KSA for a possible pipelines for refined natural gas (Methane) from Qatar and refined oil pipelines from KSA. Which will help Pakistan to get these resources without bearing the cost of Transportation through Gwadar port.

Even they would be able to spread the network from Pakistan to China and India too.

i dont know what mentality the Pakistanis (we ) are , we only criticise and does not see any good in anything , it is not possible to make everyone happy . Pipeline from Turkmanistan is on and TAPI is on which will supply gas to Afghanistan and India as well . Pipeline from Gwader is also on the cards and is an active project . Besides that OGDCL is making very good discoveries these days . Overall we are in the right direction .

 

[ziaulislam]

if PML N govt sign an expensive deal (greater than 60% oil or 8.3$ MTBU) than it would mean kick backs or in other words the nation will not forgive them. if they cant secure a deal they should go for spot buying instead.
its well known fact that oil price arent going to hit 100 any time soon (even after a decade) instead most predictions are that it will drop further down.

we dont want to import gas that turns out to be expensive than oil!!!

 

[Daneshmand]

if PML N govt sign an expensive deal (greater than 60% oil or 8.3$ MTBU) than it would mean kick backs or in other words the nation will not forgive them. if they cant secure a deal they should go for spot buying instead.
its well known fact that oil price arent going to hit 100 any time soon (even after a decade) instead most predictions are that it will drop further down.

we dont want to import gas that turns out to be expensive than oil!!!

The key figures in the article are these:

22.5 billion dollars or more (here more means the price is going to go up when the deal is actually signed) for 15 years to import 3 million tons of LNG.

Each ton of LNG is about 50 MMBTU. So in effect under this deal, the price of gas is 10 dollars per MMBTU. This is the price of LNG, the transportation cost by LNG tankers and the re-gasification cost will add another 2 or 3 dollars per MMBTU at the very minimum to the final cost. If the oil goes to 100 you will end up paying over 20 dollars per MMBTU excluding transportation and re-gasification costs. And since the deal is going to be for 15 years you will face international court of arbitration and heavy fines if you try to abandon it for example 3 years down the road.

Compare it with IP, which was set at 11 dollars per MMBTU when oil was at 100 dollars a barrel including the cost of pipeline transport. At 40 dollars a barrel of oil, the IP gas would have cost 4.4 dollars per MMBTU including the cost of transport.

This Qatar LNG gas will be about 3 times more expensive than IP.

 

[Viper0011.]

So by your logic the N gov should be given a free hand to BLESS their big dogs with these lucrative deals

1) do you have a real proof of these guys doing wrong? If you do, take it to the media and the Supreme Court. No need to do silly propaganda on here. We've been listening to lying on here for years. Not a single fukking proof was established to get anyone to go to the jail!!!

2) The nation of Pakistan is thankless, no matter how much someone does for you, there is no "good job", or a "thank you". You guys hate the US but beg for every single weapon from her and your generals and politicians alike, ask their kids to be settled in the US. The US has run your budget for decades and has stood by you for decades, still not one thank you. Instead, just negativity, same with the elected officials. If the elected guy isn't your guy, you put your country's benefit behind and play negative personal politics.

Who else you think could've brought $75 billion worth of investment in a broken, fragile Pakistani system? Or had planned for 15 years of cheaper liquid gas on today's price? (very smart move btw on government's part). Just once in a while, learn to say Thank You if someone is doing the work. It's easy to type negativity up and post, it's very hard to do these things your elected government is doing. No one trusts Pakistan for investments. Kudos to these guys who've managed to bring in so much investments that the face of Pakistan will be changed in a few years with significant economic growth!

 

[I FLY HIGH]

if PML N govt sign an expensive deal (greater than 60% oil or 8.3$ MTBU) than it would mean kick backs or in other words the nation will not forgive them. if they cant secure a deal they should go for spot buying instead.
its well known fact that oil price arent going to hit 100 any time soon (even after a decade) instead most predictions are that it will drop further down.

we dont want to import gas that turns out to be expensive than oil!!!

Do you think govt will purchase gas expensive to oil ? you are being sarcastic , chill and have some off days out of job on some hilly areas .

 

[ziaulislam]

Do you think govt will purchase gas expensive to oil ? you are being sarcastic , chill and have some off days out of job on some hilly areas .

yes i think, thats a possibility..the current price on offer is EXPENSIVE THAN furnace oil.
current offer is 12$ per MTBU(down from 15) and if calculated that comes out to be equivalent to furnace oil of 70 $
currently oil is below 70$.

and there are many mismanagements in Pakistan oil, we export raw oil and import processed oil despite govt collecting billions of dollars in levies for oil refineries. i dont think so even Afghanistan during tali-ban era had an oil crisis that we suffered from due to multiple times being defaulted ..am i being sarcastic here ??

The key figures in the article are these:

22.5 billion dollars or more (here more means the price is going to go up when the deal is actually signed) for 15 years to import 3 million tons of LNG.

Each ton of LNG is about 50 MMBTU. So in effect under this deal, the price of gas is 10 dollars per MMBTU. This is the price of LNG, the transportation cost by LNG tankers and the re-gasification cost will add another 2 or 3 dollars per MMBTU at the very minimum to the final cost. If the oil goes to 100 you will end up paying over 20 dollars per MMBTU excluding transportation and re-gasification costs. And since the deal is going to be for 15 years you will face international court of arbitration and heavy fines if you try to abandon it for example 3 years down the road.

Compare it with IP, which was set at 11 dollars per MMBTU when oil was at 100 dollars a barrel including the cost of pipeline transport. At 40 dollars a barrel of oil, the IP gas would have cost 4.4 dollars per MMBTU including the cost of transport.

This Qatar LNG gas will be about 3 times more expensive than IP.

noone doubts that pipe gas is always cheaper.
Iran offered 70% gas to oil price meaning it will be way cheaper than imported oil or LNG
but it should be remembered than Tajikistan offer is 60% to oil price and will be cheaper than iran in the long run.

1) do you have a real proof of these guys doing wrong? If you do, take it to the media and the Supreme Court. No need to do silly propaganda on here. We've been listening to lying on here for years. Not a single fukking proof was established to get anyone to go to the jail!!!

2) The nation of Pakistan is thankless, no matter how much someone does for you, there is no "good job", or a "thank you". You guys hate the US but beg for every single weapon from her and your generals and politicians alike, ask their kids to be settled in the US. The US has run your budget for decades and has stood by you for decades, still not one thank you. Instead, just negativity, same with the elected officials. If the elected guy isn't your guy, you put your country's benefit behind and play negative personal politics.

Who else you think could've brought $75 billion worth of investment in a broken, fragile Pakistani system? Or had planned for 15 years of cheaper liquid gas on today's price? (very smart move btw on government's part). Just once in a while, learn to say Thank You if someone is doing the work. It's easy to type negativity up and post, it's very hard to do these things your elected government is doing. No one trusts Pakistan for investments. Kudos to these guys who've managed to bring in so much investments that the face of Pakistan will be changed in a few years with significant economic growth!

do you think things have been improved
we are having more power losses and theft than ever,
more expensive electricity,
and over that an oil crisis.

 

[Daneshmand]

yes i think, thats a possibility..the current price on offer is EXPENSIVE THAN furnace oil.
current offer is 12$ per MTBU(down from 15) and if calculated that comes out to be equivalent to furnace oil of 70 $
currently oil is below 70$.

and there are many mismanagements in Pakistan oil, we export raw oil and import processed oil despite govt collecting billions of dollars in levies for oil refineries. i dont think so even Afghanistan during tali-ban era had an oil crisis that we suffered from due to multiple times being defaulted ..am i being sarcastic here ??


noone doubts that pipe gas is always cheaper.
Iran offered 70% gas to oil price meaning it will be way cheaper than imported oil or LNG
but it should be remembered than Tajikistan offer is 60% to oil price and will be cheaper than iran in the long run.


do you think things have been improved
we are having more power losses and theft than ever,
more expensive electricity,
and over that an oil crisis.

Not at all. Iran's offered price was 11 dollars when the oil is at 100 dollars a barrel. Turkmenistan's offer is 13 dollars when the oil is at 100 dollars a barrel. Beside you will have to pay maintenance as well royalty fees to Afghanistan for right of transit, pushing the price even higher. Not to mention having to deal with insecurity of Afghanistan making the supplies highly unreliable and hostage to various groups in lawless Afghan territory.

 

[salarsikander]

The US has run your budget for decades and has stood by you for decades, still not one thank you. Instead, just negativity,

Hi Orangzaib,

Surely US stood by us when East Pakistan was being torn apart. Sending us weapons out of good faith with no interest is very selfless act by US

 

[ziaulislam]

Not at all. Iran's offered price was 11 dollars when the oil is at 100 dollars a barrel. Turkmenistan's offer is 13 dollars when the oil is at 100 dollars a barrel. Beside you will have to pay maintenance as well royalty fees to Afghanistan for right of transit, pushing the price even higher. Not to mention having to deal with insecurity of Afghanistan making the supplies highly unreliable and hostage to various groups in lawless Afghan territory.

read the news, it was 70 vs 60% of crude oil..
yes its true its unreliable via Afghanistan but i am talking of pricing only here