Recently Pakistan has signed a 10-years agreement with Qatar over the liquefied natural gas. The bilateral agreement on LNG was signed at a significantly lower rate than the other deals that both the countries had signed.

Significance

The new agreement will help in saving US$ 300 million annually or nearly US$ 3 billion in the next ten years (1 Decade) for Pakistan.

Points To Note

  • The bilateral agreement was signed at around 31% lower rate when compared to the previous PML-N (Pakistan Muslim League – Nawaz) agreement of 2015.
  • It has been signed for a decade (10 years) which is the lowest publicly disclosed contract on the LNG in the world.
  • As per the new agreement, Pakistan will pay around US$ 316 million less than the prior agreement.
  • It will amount to saving of around US$ 3 billion in Liquefied Natural Gas import.
  • The agreement was signed after a year-long negotiation between the countries.

Agreement

The long-term contract was signed at the rate of 10.2% of Brent. With the new agreement, Pakistan will import 200 million cubic feet of LNG per day. Earlier, Pakistan used to import 500 million cubic feet of LNG in 2015 at the rate of 13.37% of Brent. Under this agreement, Pakistan will get 3 million tonnes of LNG from the Qatar Petroleum per year starting from January 2022. It will start with receiving two ships per month. In the coming three years, this will be increased to four ships. The agreement also provides for the provision of price negotiation option. Under this agreement, the price negotiation can be done after 4 years rather than ten years.

About Liquefied Natural Gas

The natural gas which mainly composed of the methane (CH4) along with the mixture of ethane (C2H6). Liquefied Natural Gas is cooled down to convert it into the liquid form to safely store and transport it.

Pakistan-Qatar sign agreement on Liquefied Natural Gas Pakistan-Qatar sign agreement on Liquefied Natural Gas