Pakistan ignores Qatar as it seeks new LNG deals from international companies

ISLAMABAD: Pakistani authorities on Thursday opened technical bids of four international companies for the supply of 400 million cubic feet per day (mmcfd) of Liquefied Natural Gas (LNG) for a period of ten years to fulfill the country’s increasing energy requirements, officials said, hoping to get a better deal than the $16 billion purchase agreement signed with Qatar in February 2016.
At present, Qatar is supplying 500mmcfd to Pakistan under a 15-year agreement at 13.37 percent of Brent crude price. It is a government-to-government agreement and its price can only be reviewed after 10 years.
Prime Minister Imran Khan’s party had accused former petroleum minister Shahid Khaqan Abbasi, who was later elected as the country’s prime minister, of signing the LNG deal with Qatar at an exorbitant rate, alleging that he had taken some kickbacks.
Pakistan’s anti-corruption watchdog, National Accountability Bureau, arrested Abbasi on Thursday in the same case. Abbasi denies any wrongdoing. 
The government has now decided to import LNG through international companies on a long-term contract based on the lowest bid, instead of signing another direct agreement with Doha.
“We have invited international bidders to get the lowest possible rate for the LNG purchase and ensure transparency,” Adnan Gilani, managing director and chief executive of Pakistan LNG, told Arab News.
Pakistan LNG is a state-owned company that buys LNG from the international market.
The foreign companies that have submitted bids include Socar Trading of Azerbaijan, ENI of Italy, PetroChina of China and Trafigura headquartered in Singapore.
The Ministry of Energy will now conduct technical evaluation of all the bids to ascertain which company has offered the lowest price for the LNG import. 
“This process will be completed by July 21,” energy ministry secretary Mian Asad Hayaud Din told Arab News.
Din also heads a price negotiation committee which is scheduled to hold the commercial opening of the lowest bid on August 2: “We are ensuring transparency at every level of the deal by following all the rules and regulations,” he said.
Qatar, which is believed to have 75 percent market share of LNG and is already supplying 500 mmcfd to Pakistan, has not submitted its bid to win a fresh contract.
Officials said that a Qatari delegation, led by Sheikh Tamim bin Hamad Al-Thani during his two-day visit of Pakistan in June, expressed its resentment that Islamabad had ignored its lowest offer of 11.05 percent of Brent for the fresh deal and instead floated tenders seeking provision of LNG for 10 years from international companies.
When asked about this, the secretary of the ministry of energy confirmed. “Yes, this is true. Qatar expressed its annoyance, but we are following our rules. Qatar has not submitted its bid to participate in the process.”
Last year, Pakistan imported nearly seven million tonnes of LNG, and this year the amount could grow to as high as 15 million tonnes and to up to 25 million to 30 million tonnes over the next three to five years. The country’s two import terminals have a re-gas capacity of 1.2 billion to 1.3 billion cubic feet of gas per day, or about nine million to 10 million tonnes of LNG a year, and they are fully utilized.