10 February 2016
Pakistan and Qatar finally signed the Pakistan-Qatar LNG contract during Prime Minister Nawaz Sharif’s visit to Qatar on 10 February 2016. According to the contract, Pakistan will import 3.75 million tons of LNG annually for 15 ears.
Pakistan and Qatar have entered a 15-year government-to-government contract with effect from March 2015 to import liquefied natural gas (LNG) from Qatar to Pakistan. According to the contract Pakistan will receive 1.5 million tons of LNG in the first year, and 3 million tons of LNG annually for the remaining 14 years. Thus, Pakistan will receive a total of 43.5 million tons of LNG in fifteen years.
The price of the LNG is linked to a certain percentage of Brent crude oil. The petroleum ministry didn’t mention it, but it would be typically around 14%.
Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi said Pakistan has finalized a 15-year, $16 billion deal of LNG.
Thus, Pakistan will receive 43.5 million tons of LNG in 15 years for an attractive price of $6.89 per million BTU.
The contract also has a review provision which allows both the seller and the buyer to seek a price review after ten years. If both the countries reach an agreed price at that point, the contract will continue for fifteen years, otherwise both the countries have right to terminate the contract.