Pakistan Looks to Sign Qatar LNG Deal Sans Guarantees

Pakistan has said that it would like to sign LNG deal with Qatar without promising sovereign guarantees as it will put multi-billion-dollar obligations on the country, reports The Express Tribune newspaper.

“Major challenges could be negotiating a contract with the consultants and arranging three-month letters of credit amounting to around $800 million,” a senior government official told The Express Tribune, adding the government would like to do it without sovereign guarantees.

According to the newspaper, Pakistan is exploring three options to bring LNG supplies including a state-to-state contract with Qatar, competitive bidding and spot purchase.

The government has nominated Pakistan State Oil (PSO) for negotiations with Qatar.

Initially Qatar had offered LNG at a price equivalent to 14.7% of Brent crude oil when it was hovering around $110 per barrel in the international market. Later, it pushed the price down to $17.437 per million British thermal units (mmbtu), a 0.5% discount over the previous rate of $18.002 for the 20-year lifetime of the project.