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Home Business

Pakistan’s Long-Term LNG Deals with Qatar: Minister Malik Highlights Key Agreements and Future Negotiations

by Anum Arif
February 6, 2025
in Business
Reading Time: 3 mins read
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LNG contract with Qatar

Pakistan's Petroleum Minister Musadik Malik sheds light on the country's crucial LNG agreements with Qatar, emphasizing the long-term supply, flexible terms, and upcoming negotiations to secure energy needs.

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Pakistan’s Petroleum Minister Musadik Malik revealed significant details regarding the country’s energy agreements with Qatar, underscoring the importance of liquefied natural gas (LNG) supplies in Pakistan’s energy mix. During a meeting of the National Assembly’s Standing Committee on Petroleum, chaired by Mustafa Shah, Malik emphasized Pakistan’s long-term LNG agreements with Qatar, which continue to play a crucial role in meeting the nation’s energy demands.

Long-Term LNG Supply Agreement with Qatar

Pakistan currently has two long-term LNG agreements with Qatar, which have been integral to the country’s gas supply strategy. Under these agreements, Pakistan receives a consistent delivery of ten LNG cargoes every month, ensuring a steady supply of natural gas, which is crucial for both domestic consumption and industrial needs. This regular influx of LNG helps meet the growing demand for energy in Pakistan and supports the country’s efforts to address energy shortages.

Cost and Flexibility of the Agreements

Malik acknowledged that while the contracts with Qatar have been relatively expensive, at a rate of $13.37 per MMBtu, they have been a necessary commitment. The high price reflects the market conditions and the premium that Pakistan pays to secure these crucial LNG supplies. Despite the cost, the minister stressed that these agreements were essential for maintaining Pakistan’s energy security and for ensuring a reliable supply of LNG to power plants, industries, and households.

In a significant development, Malik revealed that Pakistan had taken advantage of flexibility provisions within the agreement to manage its LNG requirements. Specifically, Pakistan had deferred five LNG cargoes, utilizing the option provided under the contract to reschedule shipments as necessary. This flexibility allows Pakistan to manage its supply chain efficiently, especially during periods of low demand or when the country needs to optimize its LNG imports.

Future Negotiations and Additional Contracts

Looking ahead, Minister Malik announced that further negotiations with Qatar regarding an additional LNG contract were scheduled for the following year. These talks are expected to explore expanding the LNG supply agreement, addressing Pakistan’s long-term energy needs, and potentially securing more favorable terms in the future.

He also explained that, as part of the contract structure, Pakistan is required to submit an LNG cargo plan every September and October. This allows the country to align its LNG imports with projected demand, optimizing supply schedules to ensure a stable energy flow throughout the year.

Significance of LNG in Pakistan’s Energy Landscape

The ongoing LNG agreements with Qatar are a critical component of Pakistan’s strategy to diversify its energy sources and reduce dependence on other less reliable forms of energy. Given the country’s growing energy requirements, securing consistent and flexible LNG supplies is essential for supporting industrial growth, reducing power shortages, and improving the overall energy security of Pakistan.

As negotiations for future contracts continue, Pakistan’s relationship with Qatar in the LNG sector is expected to remain a cornerstone of its energy strategy, ensuring the country can meet its energy demands sustainably in the years to come.

Tags: EnergySecurityLNGAgreementsMusadikMalikPakistanEnergyQatar
Anum Arif

Anum Arif

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