Mon. Sep 23rd, 2019

Saudi Arabia presses Pakistan to award multi-billion dollars LNG supply contract

Aftab Ahmed

Islamabad: Saudi Arabia is pressing Pakistan to award contract of importing over 100 million cubic feet per day (mmcfd) LNG to make footprints in gas market.

Saudi Arabia has been major oil supplier to Pakistan since decades. Qatar is the first country that has captured market of Pakistan. Saudi Arabia and Qatar have been two rival countries and the former presses Pakistan now to import LNG, officials told newztodays.com.

During a visit of Saudi crown prince Mohammed Bin Salman to Pakistan, two countries had signed financing agreement. However, this agreement does not mention of LNG imports. Later, Saudi Arabia pressed Pakistan to import LNG and the latter is now considering to import LNG, officials said. Saudi Arabia had already announced US$3.2 billion deferred oil payment facility.

In addition to these companies, Saudi Aramco Trading Company (ATC) is also keen to supplying LNG: 12-18 cargoes per year under Saudi Fund for Development (SFD) facility. However, financing agreement signed with Kingdom of Saudi Arabia does not mention LNG.

Read:https://newztodays.com/ogra-notifies-10-5-per-cent-cut-in-lng-prices/

Petroleum division wants government to nominate Pakistan LNG Limited (PLL) to import LNG from Saudi Arabia. Pakistan is currently looking at signing 200 mmcfd LNG import deal with Qatar. Saudi Arabia has also emerged as a competitor of Qatar in this race of winning multi-billion dollars LNG contract, officials said.

Pakistan has already signed government to government (G2G) contracts with different countries. However, Saudi Arabia and Qatar have strong lobby in Pakistan and they are making all out efforts to win contracts, officials said. The Petroleum Division is also seeking permission from the government to import LNG from ATC to be covered under SFD facility as the financing agreement does not mention LNG exclusively. The period of term contract may be ten years with a review of five years.

At present two LNG re-gasification terminals are operational in the country. Pakistan State Oil (PSO) is importing 6 LNG cargoes per month that amounts around 600 mmcfd on term contract basis including five cargoes from Qatar. LNG imported by PSO is re-gasified at the first terminal. At the second terminal, Pakistan LNG Limited (PLL) is importing two LNG cargoes per month containing 200 mmcfd on term contract basis whereas additional LNG imports are made through spot tenders to meet gas requirements of the country. Thus at the second LNG terminal, a contracted capacity of 400 mmcfd is available for importing LNG on term contract basis instead of spot purchases for better price certainty and gas supply security.

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