Pakistan finalises $21b LNG deal with Qatar

[JohnyD]

pakistan can reexport the Qatar gas to India through sea (on its way to Pak port from Qatar) at $8 and make good money from the deal!

 

[Kabira]

Sanctions would not have been a problem, if Pakistan was serious about it. .

Oil rich Iran is suffering because of sanctions and is not better then 3rd world countries. Yet piss poor Pakistan who depend mostly on textile exports will not have any problem lol

 

[Bilal.]

How? We don't have any latest price of what Iran have offered.

It was agreed at 67% of crude oil price (in terms of heating value I believe).

I wonder why people don't think about sanctions when crying about IP again and again. If west stop importing Pak products then demand of gas will fall 50% at least, after that no need to import gas from Iran anyway.

I agree with all your points. Just pointing that is sanctions are lifted then Iran gas would be very beneficial for us. Domestic discovery would of course be the best thing as local gas costs us ~$2 per mmbtu if I am not mistaking.

 

[slapshot]

I agree with all your points. Just pointing that is sanctions are lifted then Iran gas would be very beneficial for us. Domestic discovery would of course be the best thing as local gas costs us ~$2 per mmbtu if I am not mistaking.

Exactly! First Iran need to sort out things with USA and do something about sanctions. You can't just expect from a country whose economy is already choking and is heavily dependent USA.

 

[OTTOMAN]

India should not be a benchmark of any sort, there is lots of corruption in Indian deal as well.
Should we follow corrupt ways?

As per IP agreement the price of gas was 11 dollars per MMBTU

Where did you got this figure? which you from last few days are beating like record?

 

[Danish saleem]

Yes, Iran gas would be around $5 per mmbtu. In fact, even more if one factors in transportation cost.

its true Iran 's Gas is still cheaper, but International community imposed ban's on Iran, and today Pakistan not in position to refuse all the international laws, and finalize the gas deal.!

 

[Kabira]

It was agreed at 67% of crude oil price (in terms of heating value I believe).



I agree with all your points. Just pointing that is sanctions are lifted then Iran gas would be very beneficial for us. Domestic discovery would of course be the best thing as local gas costs us ~$2 per mmbtu if I am not mistaking.

Yes if Iran does not try to take advantage of Pak situation in terms of price then obviously at $5 is much cheaper. Especially with no added cost like LNG. Even TAPI is cheaper option.

 

[Gazi]

Yes if Iran does not try to take advantage of Pak situation in terms of price then obviously at $5 is much cheaper. Especially with no added cost like LNG. Even TAPI is cheaper option.

I think it would have been Better to go for Iranian Gas because the Agreement that we have done today in such Situation would have profited us if Iranian Sanctions are removed. What we are receiving from Qatar is based on International Price and would Fluctuate accordingly.

 

[ziaulislam]

7$ is good deal if struck on longterm but important fact is whats the pricing mechanism.

considering iran gas was around 70%equivalent to oil and 13$ per MTBU when oil was 100$ so it means the pricing seems to be similar.
thank God govt didnt went for the outrageous price of 10+

we already have terminal nearly build the shipping and re gasing cost should be around 2$ (0.80 $ for engro port re gasification)

lets see whether the news is true or not.

having said that pakistan should not become lousy and start building LNG plants only , as the growing demands means this gas will not even be felt.
its important that pakistan pushes for indigenous and imported coal and hydro

we will need all three in next 10 years if we are to become even a medium size economical.
so its futile to say which is better we need to build all three.
discussion should be which one first.

obviously spot buying or qatar gas is quickest solution .

regarding Iranian gas, turkey and many other countries like korea have exemptions from USA.
govt should work on getting one too.

problem is the saudis i think more than USA

 

[The SC]

Congratulations to Pakistan and Qatar for the deal. I wish to see the Iran Pakistan Gas/Oil Pipeline soon.

 

[SBD-3]

5$ from Iran is more cheaper,

Sanctioned pricing. Had Iran been free of sanctions, you would have seen a different price. Plus Iran itself agreed that the line may become operational once the sanctions are lifted. Pakistan would love to have gas in 5$ but Iran doesnt look interested in being paid in wheat and rice for such large payment.

 

[DESERT FIGHTER]

Sanctioned pricing. Had Iran been free of sanctions, you would have seen a different price. Plus Iran itself agreed that the line may become operational once the sanctions are lifted. Pakistan would love to have gas in 5$ but Iran doesnt look interested in being paid in wheat and rice for such large payment.

Sanctions ? Many countries are already buying petroleum products from Iran ..I.e india.

 

[SBD-3]

Sanctions ? Many countries are already buying petroleum products from Iran ..I.e india.

I have already shared the information about how they are doing so. China is paying them In Chinese Yuan through Russian banks (they dont want their own banks to get slammed with sanctions). India is doing something like that too (Paying through russian Rubble). Pakistan is trading on barter basis with Iran so far. But iranians dont seem interested in barter for the quantum of money involved in IP pipeline.Iran doesnt have much options and would certainly be scracting their heads after a pounding of rubble amid increasing economic voews in Russia.

 

[black-hawk_101]

In a major breakthrough, Pakistan has managed to secure a $21 billion long-term contract from Qatar to supply liquefied natural gas (LNG) at a highly attractive price, a move that is likely to help alleviate some of the severe, chronic shortages of natural gas in the country.

Under the terms of the agreement, Qatar will supply Pakistan with 500 million cubic feet per day (mmcfd) of LNG under a pricing formula that translates to a current price of LNG of $7 per million British thermal units (mmbtu), a price lower than that paid even by Indian importers, who are currently paying close to $9-$10 per mmbtu.

The government has not clarified what the pricing formula is, though LNG contracts are typically priced at a 10-15% discount to Brent, the global benchmark of crude oil. The price does not include the cost of shipping the LNG to Karachi, which can be substantial.

While the new deal is likely to be a welcome injection of supply into the national gas grid, it will not come close to solving the overall natural gas shortages which have crippled large parts of the economy. Pakistan’s total production of natural gas is currently close to 4,000 mmcfd, while demand is closer to 6,000 mmcfd. The 500 mmcfd from Qatar would, therefore, only fill about a quarter of the current shortfall.

The $7 per mmbtu price, while attractive relative to where the overall LNG market stands, is still more expensive than the $5 per mmbtu the government would currently have been paying had the Iran-Pakistan gas pipeline been fully built and operationalised by now. Price differences between LNG imports and pipeline gas are natural: the price of the LNG includes the cost of chilling it down to minus 170 degrees Celsius, whereas pipeline gas does not have that cost.

The United States has been pressuring Pakistan to import LNG from Qatar, even though gas from Iran would be cheaper because Washington wants to sustain sanctions pressure against Tehran in order to dissuade it from developing nuclear weapons. Several US and European oil companies also have a presence in the Qatar petroleum and natural gas industry.

At a meeting of the Cabinet Committee on Energy on February 12, Prime Minister Nawaz Sharif had been informed that the agreement with Qatar Gas had been finalised and that the price was set at a level lower than the ones paid by other countries in the region. Other countries had also expressed an interest in supplying LNG to Pakistan, but Qatar is the closest large supplier, which would reduce shipping costs significantly.

The LNG import terminal at Port Qasim, being constructed by Engro Elengy, a subsidiary of the Engro Corporation, is expected to be completed by March 10, ahead of its March 31 contractual deadline. Two ships carrying 50,000 tons of LNG are expected to then start arriving at Port Qasim each month initially, a pace that would slowly be increased to four ships a month.

Meanwhile, the petroleum ministry is negotiating with the industry association of Compressed Natural Gas (CNG) retailers for the sale of the first shipment.

Given the precarious finances of the energy sector, particularly with respect to the power sector, the government has tried to create a mechanism that would ensure a smooth flow of payments to LNG suppliers. At current prices, each LNG shipment would cost $30 million, which would be paid directly by the finance ministry to Pakistan State Oil, the importing entity, which would then pay Qatar Gas. The payments the finance ministry makes would be deducted from the subsidy payments it owes to independent power producer (IPPs).

The IPPs would be required to provide standby letters of credit of between $20 million and $60 million and an operative letter of credit for one months’ supply of gas utilisation of $10 million to $30 million to PSO.

Pakistan finalises $21b LNG deal with Qatar – The Express Tribune

Why not Qatar invest in a pipeline of gas from Qatar to KSA-Oman-Pakistan(Gwadar) to India and China.

 

[DESERT FIGHTER]

I have already shared the information about how they are doing so. China is paying them In Chinese Yuan through Russian banks (they dont want their own banks to get slammed with sanctions). India is doing something like that too (Paying through russian Rubble). Pakistan is trading on barter basis with Iran so far. But iranians dont seem interested in barter for the quantum of money involved in IP pipeline.

Where there is a will there is a way.. Our govt has no independent foriegn policy.., you got 2 billion as "gift" you better remain loyal... Specially if you also happen to have business interests in the brotherly country..

Why not Qatar invest in a pipeline of gas from Qatar to KSA-Oman-Pakistan(Gwadar) to India and China.

Why Dnt you stop making yourself look like a fool?