ISLAMABAD: Qatar that offered in month of June 2019 another supply of LNG at 11.05 per cent of Brent has expressed its annoyance over Pakistan’s move to float tenders seeking LNG supply for 10 years saying it is really irritating for Doha.
At present, Doha is supplying 500mmcfd to Pakistan under a 15-year agreement at 13.37% of Brent crude price. Under 15-year agreement, after 10 years, LNG price can be reviewed. However, under new offer from Qatar for 200mmcfd more supply to Pakistan, price review was to be held after 5 years’ time at a price which is 20 per cent below from the earlier price.
Qatar which regulates the 75 per cent of LNG market shared its dismay with authorities in Pakistan that companies that are to win the tenders will also purchase the product from Doha. The relevant authorities included in the delegation of Emir of Qatar Sheikh Tamim bin Hamad Al-Thani during the two-day visit of Pakistan started from June 22, 2019, had expressed their resentment when they came to know that Pakistan has floated tenders for 10 years seeking provision of LNG from international companies after getting the lowest offer from Qatar, senior officials of the government told The News which is also verified by one of top men of Petroleum Division.
Pakistan wants factually 400mmcfd LNG more for which it earlier inked Inter-Governmental Agreements (IGAs) with almost 7 countries out of which companies of three countries came up with their bids. The authorities in Pakistan shared the lowest bid of the three countries with Qatar. Then Qatar first gave LNG supply at lower cost of 11.25% which it later on further reduced the cost at 11.05 per cent.
The officials said that the three countries that under IGAs gave their bids under government to government arrangements are also displeased when the government of Pakistan shared their lowest bid with Qatar which was not part of bidding process. But the one of the top men of Petroleum Division responded saying: “No, not at all as the Petroleum Division when approached Qatar authorities concerned after getting the bids from the three countries under IGAs telling Doha this rate Pakistan has got now what is offer from Qatar.
“Then, in return, Qatar lowered the rate from the lowest bid from the said countries Pakistan had. After that, Pakistan approached the three said countries which had submitted their bids telling them to match Qatar offer, and they lowered their bids but not at the level of Qatari offer.’’ However, authorities in Qatar got annoyed when its offer was shared in the press and on top of it the government’s company Pakistan LNG Limited (PLL) floated tendered for 10 years seeking LNG provision which further irritated the authorities in Qatar. The official said that Pakistan’s relevant authorities also continued to apologies during the two-day visit of Emir of Qatar to Pakistan. Earlier, LNG supply deal done with Qatar during PML-N is under NAB radar. State-owned Pakistan LNG Limited (PLL) invited bids from international suppliers for supply of LNG on 10 years term on a delivered ex-ship basis at Port Qasim as the country seeks consistent, reliable and cheap source of LNG, people familiar with the matter said. The supplier will be required to provide two consignments of 140,000 cubic metres each, every month for 10 years– a total of 240 consignments. On the coming Thursday, the international companies will submit their bids, and they will be opened in next 3 week time.
(This news/article originally appeared in The News on July 16th, 2019)