Pakistan May Renegotiate Qatar Deal: Report

Pakistan’s new government may look to renegotiate the long-term LNG contract signed with Qatar in 2016 if it finds any evidence of irregularity, according to local media reports.  

Federal minister for petroleum and natural resources Ghulam Sarwar Khan said August 29 that the National Accountability Bureau (NAB) was actively probing the LNG supply agreement reached between the Pakistan State Oil (PSO) and Qatargas in February 2016, The News reported September 1. NBA approved the probe in June this year. 

If any evidence of irregularity, such as a violation of the Public Procurement Regulatory rules, was found, the government would seek to renegotiate the agreement, he told the newspaper. Pakistan’s Senate Standing Committee on Petroleum is also looking into the deal and in June sought full details of the Qatar LNG deal from country’s petroleum ministry. The committee wants to know why previous government struck the deal with only Qatar while options for entering into deals with other LNG producers were available. 

Qatar and Pakistan signed a 20-year LNG deal in 2016 under which Qatargas will supply 1.3mn mt/yr of LNG to Pakistan, with provisions allowing the volume to increase to 2.3mn mt/yr.

This development comes amidst reports that Pakistan has benefitted significantly by replacing furnace oil and diesel with regasified LNG (RLNG) for power generation. In July The News reported that the country has saved close to $2bn-$3bn in the last few years by replacing expensive fuels such as furnace oil and diesel with RLNG.

The south Asian nation started importing LNG in 2015 with commissioning of FSRU Exquisite, located at Port Qasim near Karachi. Pakistan commissioned its second FSRU late last year.