Pakistan receives six cargoes each month from Qatar at 13.37% of the Brent.

Pakistan may pursue a 15-year LNG deal with Qatar on a G2G (government to government) basis, two cargoes per month with a reopening price clause after 11 years, according to a senior coalition government official’s statement to ‘The News‘.

This is likely to be addressed during Prime Minister Shehbaz Sharif’s next visit to the Gulf state, which an official said is likely to August 23-24.

This comes as reports say Pakistan is also expected to sell PIA shares in order to give over administration of the national flag carrier to Qatar or the UAE on a G2G basis. Reports suggest the Islamabad airport could also be handed over to one of the two nations for management.

“PIA has been running into huge losses for a long time and it will be sane to hand over its management to either Qatar or the UAE. And the Islamabad airport is also not running efficiently,” he said.

There is also a proposal to sell two RLNG-based power stations, Haveli Bahadur Shah and Balloki. The 1,223 MW Balloki combined-cycle gas-fired power station addresses Pakistan’s energy gap by becoming one of the most reliable power plants in the world.

The plant, which is more than 61% efficient, began commercial operations in July 2018 and produces enough energy to power more than six million Pakistani households.

With an unprecedented efficiency of 62.44% on RLNG fuel, the 1,230 MW combined-cycle Haveli Bahadur Shah project is the most efficient power plant in the world. This great performance immediately translates into substantial savings for the national exchequer through fuel cost reductions, as well as providing consumers and businesses with affordable power.

Both appear to be priced at $2 billion, but this deal may not be practical because Pakistan has $450 million in equity in both projects, which may be sold to either the UAE or Qatar using loans obtained by the government for the projects.

In terms of liabilities, purchasers may not own them because they are produced by Pakistani management. People and opposing parties will begin to criticise the choice if both are sold for $450 million. As a result, reports say certain transactions may not take place.

Meanwhile, the Nepra has reduced the yields on both plants to 12% in dollar terms, which may make them unappealing to potential purchasers.

However, there is a likelihood that the senior officials may pursue the sale of both projects with the authorities in the UAE and Qatar. According to the idea, the purchasers would be responsible for supplying LNG to both power plants, but they will be required to pay for the use of the infrastructure of LNG terminals and pipelines.

In February 2016, Pakistan signed a 15-year LNG agreement with Qatar at 13.37% of Brent, including a reopening mechanism after 11 years.

Similarly, in 2017, the country’s 100% owned Pakistan LNG Limited signed two term agreements with LNG trading businesses ENI and GUNVOR. Then, on February 26, 2021, it inked a 10-year LNG agreement with Qatar at 10.2% of Brent, with a five-year reopening clause. 

Currently, Pakistan receives six cargoes each month from Qatar at 13.37% of the Brent, two cargoes at 10.2% of the Brent under GtG arrangements, and one cargo from ENI at 12.14% of the Brent.

The Pakistani government has also chosen to offer Qatar a 51% stake in New York’s Roosevelt Hotel and the country’s national airlines.