Pakistan May Change Its LNG Deal with Qatar Next Year
Pakistan has a liquefied natural gas (LNG) deal with Qatar. This deal lets either side start talks to change the price next year. However, no one has decided yet if they will start these talks, according to Pakistan’s Petroleum Minister, Musadik Malik.
Minister Malik explained that he was telling a parliamentary committee about Pakistan’s LNG contracts. A local newspaper, The News, had reported that he said, “The Qatar agreement is costly, and we will negotiate better terms next year.” He added that one part of the Qatar LNG deal allows for a price review in the 10th year. This gives Pakistan one full year to decide what to do.
Pakistan’s largest LNG agreement was signed in 2016. It is between Pakistan State Oil and Qatar’s company, QatarGas-2, which is the world’s largest LNG producer. The deal supplies up to 3.75 million tons of LNG each year for 15 years. However, if the two sides cannot agree on a new price, the deal can end after 11 years instead of 15.
Right now, Pakistan is facing an economic crisis. Because of this, power use in the country has dropped. More than one-third of Pakistan’s electricity comes from natural gas. Even though the country is using less power, it still has to pay for the capacity it agreed to under older contracts with independent power producers.
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In December, Minister Malik mentioned that Pakistan had extra LNG available. He said that Pakistan had postponed five LNG shipments from the Qatar deal by one year. This means Pakistan will now receive these shipments in 2026 instead of 2025, and there is no extra penalty for delaying them.
