Pakistan Close to Deal With Qatar Over LNG for Power Plants

[Kabira]

If price is too high then PTI need to organize protest instead of wasting time on useless corridor drama. Especially since this deal is supposed to last 15 years.

 

[Viper0011.]

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.

Your ENTIRE argument is flawed and baseless. This is a PRIME example of how Pakisanis JUST find wrong in everything. Everything has a conspiracy theory behind it. Allow me to explain how these contracts work as it is VERY clear you've never been in a national / global contract negotiation.

When a contract says "15 years" or 10 or 5 years, that refers to the validity of the contract. In legal terms, that's the duration of the contract within which, all stipulations, terms and conditions will be in effect for all parties involved. Anyone not following the contract, will be in breach of the contract and will face penalties and fines.
Now if you read my posts from a few months ago, when the Oil first hit $ 50.00, I posted on here multiple times that this is the time for the Pakistani government to do a long term deal with one of the Arab nations. Turned out, I am not the only forward looking person and that you also have very sharp people in your government who realized that.

So when you buy oil outside of the regular commodity prices (which fluctuate every day, little or more), you are "fixing" the price of the oil for a said amount of time. In this case, it is 15 years. This is a bargain, a STEAL not just a mere deal. The $ 8+ cost is delivered cost as there are no refineries or pipelines involved. $ 8 or "more" SIMPLY refers to the transportation charges that may go up. OR, if the phase II or phase III of the contract states that a pipeline or a refinery will be built in the future, the "more" refers to that cost. BUT, the oil remains fixed for 15 years.

This is in fact a HUGE deal for Pakistan. You've already seen deflation a lot, this will reduce everything's prices further and will provide a great chance to produce energy in a cost effective manner, reduce debt, increase economical activity and, with the help of the China trade route and trade zones being built, take off Pakistan's economy to where its never been in its entire history.
Instead of just appreciating some hard work that is being put into all these projects, you are too busy in finding a needle in the hay stack. If you don't act like a nation and a team, you'll ALWAYS be behind and one day, you won't have no Pakistan to refer to. So wake up, and work as a nation and promote peace, stability and economic growth so your country can actually become somewhat interesting to the global population and a better place to live. Negativity comes from people who don't have a whole lot of achieve in life. Ambitions create opportunity and this right here, is a result of those ambitions. Everyone will see results of the hard work being put into getting Pakistan's economy in a better place, in about 3 years if the peace and stability can remain in place.

 

[Daneshmand]

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

Here is a news from your own country: IP pipeline project: Pakistan to pay $6/MMBTU more for gas price

As you can see IP is 11 dollars, TAPI is 13 dollars without the transit fee to Afghanistan. It is always a good idea to do a google search and look at reliable News sources, quoting real figures.

Have fun.

 

[ziaulislam]

Here is a news from your own country: IP pipeline project: Pakistan to pay $6/MMBTU more for gas price

As you can see IP is 11 dollars, TAPI is 13 dollars without the transit fee to Afghanistan. It is always a good idea to do a google search and look at reliable News sources, quoting real figures.

Have fun.

what tid you expected from your own country news.
why did you think it took so long for the Project to even take place , it was because of cost ..
when cost issue was resolved primarily due to our need, sanction came up.
fact is the project would have been completed back in 2004 had iran agreed to such a price but not until 2010-12 the price issue was solved, by than iran was under sanctions from both EU and USA , Pakistani main export destinations, meaning that it i would have been alot of trouble to go with it

at this moment govt intend to build a pipeline till gawadar and connect to iran later if sanctions lifted

 

[Pak_Sher]

This is a good deal for Pakistan and will help overcome energy shortages. Relief for the average citizen.

 

[ziaulislam]

This is a good deal for Pakistan and will help overcome energy shortages. Relief for the average citizen.

an expensive relief for middle class, while lots of kickbacks for certain peoples

 

[Pak_Sher]

an expensive relief for middle class, while lots of kickbacks for certain peoples

Kickbacks happen all over the world, so let's get over it. Let's build the economy and then we can come up with more rules and processes to catch corruption.

 

[I FLY HIGH]

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.

Could you explain what is the source of the rate 12 $per mmbtu ? do you have a contract copy or it is just an imagination while taking a half nap in chilly winters ?

 

[Kabira]

Your ENTIRE argument is flawed and baseless. This is a PRIME example of how Pakisanis JUST find wrong in everything. Everything has a conspiracy theory behind it. Allow me to explain how these contracts work as it is VERY clear you've never been in a national / global contract negotiation.

When a contract says "15 years" or 10 or 5 years, that refers to the validity of the contract. In legal terms, that's the duration of the contract within which, all stipulations, terms and conditions will be in effect for all parties involved. Anyone not following the contract, will be in breach of the contract and will face penalties and fines.
Now if you read my posts from a few months ago, when the Oil first hit $ 50.00, I posted on here multiple times that this is the time for the Pakistani government to do a long term deal with one of the Arab nations. Turned out, I am not the only forward looking person and that you also have very sharp people in your government who realized that.

So when you buy oil outside of the regular commodity prices (which fluctuate every day, little or more), you are "fixing" the price of the oil for a said amount of time. In this case, it is 15 years. This is a bargain, a STEAL not just a mere deal. The $ 8+ cost is delivered cost as there are no refineries or pipelines involved. $ 8 or "more" SIMPLY refers to the transportation charges that may go up. OR, if the phase II or phase III of the contract states that a pipeline or a refinery will be built in the future, the "more" refers to that cost. BUT, the oil remains fixed for 15 years.

This is in fact a HUGE deal for Pakistan. You've already seen deflation a lot, this will reduce everything's prices further and will provide a great chance to produce energy in a cost effective manner, reduce debt, increase economical activity and, with the help of the China trade route and trade zones being built, take off Pakistan's economy to where its never been in its entire history.
Instead of just appreciating some hard work that is being put into all these projects, you are too busy in finding a needle in the hay stack. If you don't act like a nation and a team, you'll ALWAYS be behind and one day, you won't have no Pakistan to refer to. So wake up, and work as a nation and promote peace, stability and economic growth so your country can actually become somewhat interesting to the global population and a better place to live. Negativity comes from people who don't have a whole lot of achieve in life. Ambitions create opportunity and this right here, is a result of those ambitions. Everyone will see results of the hard work being put into getting Pakistan's economy in a better place, in about 3 years if the peace and stability can remain in place.

Are you saying that gas price will stay the same even if oil prices went up to $100 once again? I remember 6 months ago Qatar offered price of around $18.

Here is a news from your own country: IP pipeline project: Pakistan to pay $6/MMBTU more for gas price

As you can see IP is 11 dollars, TAPI is 13 dollars without the transit fee to Afghanistan. It is always a good idea to do a google search and look at reliable News sources, quoting real figures.

Have fun.

Source for TAPI price?

 

[Daneshmand]

Are you saying that gas price will stay the same even if oil prices went up to $100 once again? I remember 6 months ago Qatar offered price of around $18.



Source for TAPI price?

Use google. Stop being lazy.

 

[Kabira]

Use google. Stop being lazy.

TAPI price of $13 was in 2012, now it should be $6-7.

 

[Daneshmand]

TAPI price of $13 was in 2012, not it should be $6-7.

That is the point genius. The oil prices have gone down. Both TAPI and IP were linked to oil price, so IP would be even cheaper. In addition you did not have to pay transit royalty fees to Afghanistan in case of IP and even deal with insecurity of Afghanistan.

 

[Kabira]

That is the point genius. The oil prices have gone down. Both TAPI and IP were linked to oil price, so IP would be even cheaper. In addition you did not have to pay transit royalty fees to Afghanistan in case of IP and even deal with insecurity of Afghanistan.

But genius whats the point if western world who import most of Pak products put sanctions? IP gas will be useless in that case. There is shortage of gas, once sanctions are approved half of Pak industry will be shut down. No need for gas after that.

 

[ArsalanKhan21]

Gas pipeline from Iran is the best solution compared LNG that is more expensive. LNG's relatively high cost of production and the need to store it in expensive cryogenic tanks have hindered widespread commercial use. Who is getting fat contracts and commissions to install LNG plant in Karachi ? Any bomb explosion at LNG plant will be extremely deadly.

 

[OTTOMAN]

If price is too high then PTI need to organize protest instead of wasting time on useless corridor drama. Especially since this deal is supposed to last 15 years.

PTI failed to protest, when Zardari was signing IPI pipeline, which even India backed out of price, and eventually bought from US, which was cheaper, even after paying all the commissions and transport and USA tag.