This Fast Growing LNG Market Is Scrambling For New Supply
A senior Pakistani official said a few weeks ago that
However, after the deal was reached, growing criticism mounted from Pakistani politicians that claim the country received unfavorable contractual terms from Qatar. A Pakistani governmental audit in 2018 reached a similar conclusion, claiming that the price – 13.37 percent of the average price of Brent oil futures for the preceding three months negotiated with Qatar was at a higher rate than trading companies were offering in the open market.
On January 21, Pakistani Prime Minister Imran Khan traveled to Doha to seek a possible price renegotiation, including a one-year credit facility to defer payments to help ease the country’s balance of payments crisis. Khan did not, though, press for a reduction in contractual prices, but only requested an early review of LNG prices after a period of five to seven years, instead of the contract’s 10 years.
Growing gas demand
Pakistan is one of the world’s
Pakistan has been negotiating with eight countries with whom it has signed inter-governmental agreements in recent years, including Qatar, Russia, Turkey, Italy, Oman, Azerbaijan, Malaysia, and Indonesia. A Saudi Arabian delegation representing state-owned oil major Saudi Aramco has also shown interest in a gas deal with Pakistan. A Pakistani official told Reuters recently that state-run Qatargas put forward the lowest bid for a long-term LNG supply contract that would have a price review after five or 10 years.
Pakistan’s debt woes
Pakistan must secure energy in order to reduce blackouts and chronic power outages that have hindered economic growth, and LNG imports provide an appealing opportunity. That said, the move is politically charged, with complaints about high prices and corruption. As such, the country’s ambitions to procure LNG is encountering headwinds. Pakistan is facing a mounting debt problem, and dwindling foreign reserves, all making it harder to pay for necessary imports. As a result, the Pakistani government received a
Qatar flexes its LNG muscles
The new Pakistani deal with Qatar, moreover, shows that Doha is still pressing ahead to maintain its lead as the top global LNG exporter, even as Australia
However, going forward, Qatar will solidify its hold as the world’s top LNG exporter as it develops more gas in its
By Tim Daiss for Oilprice.com
More Top Reads From Oilprice.com: