Qatargas to as­sess Pak­istan pre­pared­ness be­fore sign­ing long-term LNG deal

The Pak Banker - - COMPANIES/BOSS -

Amid hic­cups in the fi­nal­i­sa­tion of fi­nan­cial ar­range­ments for Liq­ue­fied Nat­u­ral Gas (LNG) im­ports, a man­age­ment del­e­ga­tion of Qatargas (QG) is ex­pected to visit Is­lam­abad next week for as­sess­ment of on-ground sit­u­a­tion be­fore com­mit­ting a long-term deal.

The fi­nal­i­sa­tion of LNG sup­ply chain has be­come all the more im­por­tant given the fast ap­proach­ing win­ter when do­mes­tic gas sup­plies would be fac­ing ex­treme short­ages be­cause of surge in con­sump­tion lev­els in the residential sec­tor. Se­nior gov­ern­ment of­fi­cials told Dawn on Mon­day that a se­nior man­age­ment team of the QG has vol­un­teered a visit to Is­lam­abad start­ing Aug 26. They have some other clients in wait­ing and want to have a fair as­sess­ment of Is­lam­abad's pre­pared­ness for a long-term deal, he said. Pak­istan, he said, had so far been un­able to com­plete con­di­tion prece­dent for a long-term con­tract for im­port of LNG for 15 years.

"The sit­u­a­tion is com­plex on ground," he said, adding that the ba­sic re­quire­ment for open­ing of standby let­ter of credit (SBLC) to en­able LNG im­port. Se­condly, the two reg­u­la­tors - Oil and Gas Reg­u­la­tory Au­thor­ity and Na­tional Elec­tric Power Reg­u­la­tory Au­thor­ity - have not yet fi­nalised prices for sale of LNG and re­sul­tant power pur­chase price.

On top of that, the gov­ern­ment has not yet put in place pay­ment mech­a­nism for LNG sup­ply chain. As a con­se­quence, the three ma­jor stake­hold­ers to the LNG sup­ply chain - Sui South­ern Gas Com­pany, Sui North­ern Gas Pipe­lines and Pak­istan State Oil - have not yet signed a tri­par­tite agree­ment. With­out this tri­par­tite agree­ment, the gas price agree­ment be­tween a Pak­istani en­tity (PSO) and a for­eign firm (QG in this case) can­not be inked, said the of­fi­cial.

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