Qatar Strikes LNG Supply Deal with Pakistan
Qatar Petroleum (QP) has signed a 10-year deal to supply up to 3mn metric tons/year of LNG to Pakistan State Oil Co, the LNG exporter said on February 26, with supplies due to start in 2022.
The latest agreement builds on a 15-year supply contract signed in 2016 between Qatari and Pakistani entities, covering 3.75mn mt/yr of LNG. Pakistan is looking to expand gas use in power generation, so it can decommission dirtier and more expensive oil-fired capacity and overcome energy shortages.
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"With a well-established gas market and distribution system, Pakistan is a strategically important market for Qatar LNG," QP CEO and Qatari energy minister Saad Sherida Al-Kaabi said in a statement. "We are encouraged by Pakistan's exceptional growth and excellent economic potential as well as by the prospect of it being one of the world's fastest growing LNG markets."
Pakistan began importing LNG in 2015, after the launch of the 4.5mn mt/yr Engro Elengy terminal. The 5mn mt/yr Pakistan GasPort terminal was brought on stream two years later. Both facilities are in Port Qasim.
Pakistan also buys LNG on a spot basis, with QP recently filing a winning bid for the supply of a cargo in mid-April, linked to crude oil. Asian spot prices spiked in January as a result of a winter freeze, strengthening the case among buyers for long-term contracts linked to crude. Pakistan earlier this week secured a $1.1bn loan from the International Islamic Trade Finance Corp to cover the purchase of oil, LNG and refined petroleum products.
QP also recently entered a deal with commodities trader Vitol for 1.25mn mt/yr of LNG supply to Bangladesh.