_akhbar.jpg)
ISLAMABAD: Pakistan has invoked price-review provisions under two government-to-government (G2G) liquefied natural gas (LNG) supply agreements with Qatar to secure cheaper gas, reduce annual cargo commitments and renegotiate the pricing formula, while simultaneously seeking an emergency supply bailout for the peak winter months of December and January.
The clause requires both sides to review and, if necessary, adjust the pricing formula so that the contract price falls within the range of prices under comparable LNG contracts, irrespective of the source of supply. The review is to be benchmarked against comparable contracts and reputable industry publications.
Amid disruptions in LNG transportation through the Strait of Hormuz and force majeure restrictions imposed by QatarEnergy, Pakistan wants Doha to provide a reasonable number of additional cargoes for December and January to help meet domestic energy requirements. “A high-level Pakistani delegation, headed by Federal Minister for Petroleum Ali Pervaiz Malik, has arrived in Qatar to hold crucial negotiations with QatarEnergy on the revision of long-term supply agreements, immediate winter supplies and the annual delivery plan for 2027,” top official sources of the Energy Ministry told The News. “The delegation comprises Special Assistant to the Prime Minister Lt Gen Muhammad Zafar Iqbal (retired), Petroleum Secretary Hamed Yaqoob Sheikh and other relevant officials. It departed for Qatar on Tuesday.”
To cater to the immediate needs of winter season, Pakistan is seeking one LNG cargo for the current month of November and four to five cargoes each for December and January. However, the country’s overall requirements stand at nine cargoes for December and 11 for January, making the availability of additional supplies critical during the peak winter demand period.
The negotiations are taking place against the backdrop of supply disruptions and force majeure restrictions imposed by QatarEnergy until the end of December. One LNG cargo destined for Pakistan has already been affected before entering the Strait of Hormuz, despite clearance from Iranian authorities. With LNG transportation from Qatar reportedly recovering to around half of pre-war levels, Islamabad is hoping to persuade Doha to accommodate its immediate requirements and ensure maximum possible supplies during the coming winter.
Sources said Pakistan earlier demanded a reduction in the price under its first LNG contract from 13.37% to 10.20% of Brent crude. QatarEnergy rejected the specific demand but subsequently offered a reduced price of 11.36% applicable to both LNG agreements. Pakistan also sought to retain the price at 10.20% of Brent under the second contract for all future supplies. QatarEnergy, however, demanded an increase to 11.98% and eventually presented a final offer of 11.96% of Brent for both agreements.
Official sources said QatarEnergy had finalised its offer and Pakistan was now required to take a decision on the revised pricing arrangement. The proposed price revision is part of a multi-billion-dollar LNG supply arrangement. However, the price offered by Qatar remains higher than Pakistan’s demand, leaving the government to decide whether to accept the offer or continue negotiations. Pakistan has also sought 66 cargoes instead of 108.
Besides lower LNG prices, Pakistan is seeking a substantial reduction in annual cargo commitments to align contracted supplies with declining domestic consumption.
Meanwhile, the government has rejected the bids submitted by TotalEnergies and QatarEnergy for two spot liquefied natural gas (LNG) cargoes scheduled for delivery in December and January, following a review by the board of Pakistan LNG Limited (PLL).
TotalEnergies submitted two bids, offering higher bid prices of Rs24.434 billion for a December cargo of 140,000 cubic meters and Rs24.282 billion for a January cargo. QatarEnergy submitted one bid of Rs27.776 billion for the December cargo, which is the highest one.
After examining the offers, the PLL board decided to reject the bids under the applicable Public Procurement Regulatory Authority (PPRA) rules.
