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Thread: Qatar agrees to slash price for LNG export

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  1. #1
    Senior Member Fassi's Avatar
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    Qatar agrees to slash price for LNG export

    ISLAMABAD: Qatar has offered to revise the price down for export of liquefied natural gas (LNG) to Pakistan in a proposed government-to-government arrangement that will help ease acute energy shortages.

    “Qatari government has agreed to slash the LNG price further compared to its earlier offer during talks in Islamabad early this month,” a source told The Express Tribune.

    The price will be negotiated and finalised in talks between ministers of the two countries in Doha on February 8. The volume of LNG imports would also come up for discussion.

    Petroleum Minister Shahid Khaqan Abbasi will lead the Pakistani delegation during the deliberations.

    Earlier, during meetings with officials of the previous PPP-led government, Qatar had offered to export LNG at a price equivalent to 14.7% of Brent crude oil rate when it was hovering around $110 per barrel in the international market.

    Later, Doha pushed the price down to $17.437 per million British thermal units (mmbtu), a 0.5% discount over the previous rate of $18.002 per mmbtu for the 20-year lifetime of the project.

    The price did not cover capital cost of LNG terminal and its charges, import expenses, re-gasification, wastage and shipping costs. The additional costs would add about $2.084 per mmbtu to the quoted price.

    Though the cabinet gave the go-ahead to Sui Southern Gas Company (SSGC) to purchase LNG from Qatar, but it did not approve the offered price.

    Sources said Pakistan and Qatar would also discuss, during talks early next month, the possibilities of forming joint ventures between state-owned companies of the two countries like Oil and Gas Development Company (OGDC) and Pakistan Petroleum Limited (PPL).

    According to a senior government official, the Qatari government is willing to make first delivery of LNG by November this year but it has stopped short of giving firm assurances. However, Qatari officials were flexible in finalising supply arrangements, he said.

    Preliminary talks

    On January 2, a delegation of Qatar Gas Company comprising Abdullah Ahmad Al Hussaini and Hamad Abdul Aziz Al Mahanadi held preliminary talks with senior officials of the Ministry of Petroleum and Natural Resources, Inter-State Gas Systems, Sui Southern Gas Company and Pakistan State Oil.

    Pakistan said it was eager to buy 200 million cubic feet of LNG per day (mmcfd), which would be re-gasified at the terminal being set up by Engro Vopak Terminal Limited (EVTL) at the Port Qasim and later injected into the system.

    By 2015, the volume will be increased up to 400 mmfcd. Pakistan is interested in importing two billion cubic feet per day in the next two-and-a-half years.

    According to the official, the Qatari delegation assured the Pakistani side that they had enough gas, but they did not commit any volume. They were just flexible and assessed Pakistan’s requirement and progress on setting up the LNG import handling facility.

    Voicing satisfaction over the financial health of Pakistan State Oil – the oil marketing giant with extensive experience in importing and meeting oil needs of the country – the Qatari delegation believed that the company would encounter no difficulty in opening letters of credit for LNG import.

    Pakistani side said it would purchase some quantity of LNG from Qatar on a government-to-government basis and more would be imported through spot purchases from global markets.

    http://tribune.com.pk/story/661196/m...or-lng-export/
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  2. #2
    Media Editor Razamustafa76's Avatar
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    Near-agreement: Pakistan, Qatar likely to finalise LNG price

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    ISLAMABAD:

    Pakistan and Qatar are likely to agree on a price for supply of liquefied natural gas (LNG) and finalise a deal in upcoming talks slated for February 18 in Doha.

    In this regard, a Pakistan delegation, led by Petroleum and Natural Resources Minister Shahid Khaqan Abbasi, will participate in the Pak-Qatar joint ministerial meeting, sources say.

    On the sidelines, energy companies of the two countries are expected to sign the Head of Agreement, which has been drafted by the Qatari government.

    “Gas price will also be on the agenda. Pakistan has reviewed the Head of Agreement and the two sides will discuss it,” an official said.

    Qatar has also suggested that it can revise the price downward for LNG export in a proposed government-to-government arrangement that will help ease energy shortages in Pakistan.

    Click image for larger version. 

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    In the Head of Agreement, Qatar insists that the LNG supply contract should be for 15 years extendable for another five years with no “price reopener”. It calls for slapping a penalty of $200 million for terminating the agreement at any stage. Furthermore, the LNG price should be fixed as a percentage of Brent crude oil.

    Earlier, during negotiations with the previous PPP-led government, Doha had offered LNG export 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.

    The price did not cover capital cost of an LNG terminal and its charges, import expenses, re-gasification, wastage and shipping costs. The additional costs would add about $2.084 per mmbtu to the quoted price.

    According to a senior government official, Qatar is willing to make the first delivery of LNG by November this year but it has stopped short of giving firm assurances. However, it is flexible in finalising supply arrangements.

    “Now, the government of Qatar has agreed to further slash the price to finalise the contract,” the official said.

    LNG terminal

    The board of directors of Sui Southern Gas Company has approved award of a contract to Engro Vopak Terminal Limited (EVTL) for setting up an LNG handling facility at its existing terminal at Port Qasim.

    The case would be tabled before the Economic Coordination Committee (ECC) for formal approval of the contract, he said.

    Earlier, Qatar had asked Pakistan to set up an LNG terminal before striking a supply deal. Now, as the terminal contract is going to be awarded, this will aid the upcoming talks.

    Demand

    On January 2, a delegation of Qatargas comprising Abdullah Ahmad Al Hussaini and Hamad Abdul Aziz Al Mahanadi held preliminary talks here with senior officials of the Ministry of Petroleum and Natural Resources, Inter-State Gas Systems, Sui Southern Gas Company and Pakistan State Oil.

    Pakistan is eager to buy 200 million cubic feet of LNG per day (mmcfd), which will be re-gasified at the Port Qasim terminal and later injected into the system.

    By 2015, the volume will be increased up to 400 mmcfd. The country is interested in importing two billion cubic feet per day in the next two-and-a-half years.

    According to the Head of Agreement, Qatargas – which is considered world’s largest LNG company – will enter into an agreement for LNG supply with Pakistan State Oil. The two countries will also discuss possibilities of forming joint ventures between their state-owned companies like Oil and Gas Development Company (OGDC) and Pakistan Petroleum Limited (PPL).
    http://tribune.com.pk/story/670987/n...ise-lng-price/

  3. #3
    Senior Member Sinbad's Avatar
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    Near-agreement: Pakistan, Qatar likely to finalise LNG price

    ISLAMABAD:

    Pakistan and Qatar are likely to agree on a price for supply of liquefied natural gas (LNG) and finalise a deal in upcoming talks slated for February 18 in Doha.
    In this regard, a Pakistan delegation, led by Petroleum and Natural Resources Minister Shahid Khaqan Abbasi, will participate in the Pak-Qatar joint ministerial meeting, sources say.
    On the sidelines, energy companies of the two countries are expected to sign the Head of Agreement, which has been drafted by the Qatari government.

    “Gas price will also be on the agenda. Pakistan has reviewed the Head of Agreement and the two sides will discuss it,” an official said.
    Qatar has also suggested that it can revise the price downward for LNG export in a proposed government-to-government arrangement that will help ease energy shortages in Pakistan.

    In the Head of Agreement, Qatar insists that the LNG supply contract should be for 15 years extendable for another five years with no “price reopener”. It calls for slapping a penalty of $200 million for terminating the agreement at any stage. Furthermore, the LNG price should be fixed as a percentage of Brent crude oil.

    Earlier, during negotiations with the previous PPP-led government, Doha had offered LNG export 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.
    The price did not cover capital cost of an LNG terminal and its charges, import expenses, re-gasification, wastage and shipping costs. The additional costs would add about $2.084 per mmbtu to the quoted price.

    According to a senior government official, Qatar is willing to make the first delivery of LNG by November this year but it has stopped short of giving firm assurances. However, it is flexible in finalising supply arrangements.
    “Now, the government of Qatar has agreed to further slash the price to finalise the contract,” the official said.

    LNG terminal

    The board of directors of Sui Southern Gas Company has approved award of a contract to Engro Vopak Terminal Limited (EVTL) for setting up an LNG handling facility at its existing terminal at Port Qasim.
    The case would be tabled before the Economic Coordination Committee (ECC) for formal approval of the contract, he said.
    Earlier, Qatar had asked Pakistan to set up an LNG terminal before striking a supply deal. Now, as the terminal contract is going to be awarded, this will aid the upcoming talks.

    Demand

    On January 2, a delegation of Qatargas comprising Abdullah Ahmad Al Hussaini and Hamad Abdul Aziz Al Mahanadi held preliminary talks here with senior officials of the Ministry of Petroleum and Natural Resources, Inter-State Gas Systems, Sui Southern Gas Company and Pakistan State Oil.
    Pakistan is eager to buy 200 million cubic feet of LNG per day (mmcfd), which will be re-gasified at the Port Qasim terminal and later injected into the system.

    By 2015, the volume will be increased up to 400 mmcfd. The country is interested in importing two billion cubic feet per day in the next two-and-a-half years.
    According to the Head of Agreement, Qatargas – which is considered world’s largest LNG company – will enter into an agreement for LNG supply with Pakistan State Oil. The two countries will also discuss possibilities of forming joint ventures between their state-owned companies like Oil and Gas Development Company (OGDC) and Pakistan Petroleum Limited (PPL).

    Published in The Express Tribune, February 13th, 2014.

  4. #4
    Member saeed1000's Avatar
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    Pakistan Pakistan

    FBR urged to stop LPG smuggling through effective border control system

    ISLAMABAD: Former President of LCCI & Chairman of LPG Association of Pakistan Farooq Iftikhar has urged the Federal Board of Revenue (FBR) and Customs authorities to make vigilance system effective at borders because the smuggling of LPG rising day by day causing huge loss to the national economy.
    “It is a matter of serious concern both for local LPG industry, as well as public safety, he said in a statement. He said that smuggling of Liquefied Petroleum Gas (LPG) was increasing sharply from Taftan and Mand Borders in connivance with the some corrupt elements of the concerned departments.
    He said that smuggling cannot be eliminated but the increase to a level where it has far reaching effects on the economy of Pakistan is beyond our comprehension. He said that daily consumption of LPG in Pakistan varies from 1700 MT to 2300 MT approximately. Around 1300 to 1400 MT are produced locally and the rest is imported either through Karachi Sea Port or through Taftan and Mand borders in Balochistan.
    Farooq Iftikhar said that a perusal of Customs record will show a vast difference in the legally imported quantity through Karachi sea port and from Mand and Taftan. He said that around 500 MT per day of LPG comes from Mand and Taftan of which only 20 percent is properly cleared. This smuggled LPG is transported to other cities of Pakistan using the official documents of cleared bowers repeatedly.
    He said that the government should check smuggling of gas in low quality cylinders which may cause a big incident. If retailers are offering discount of Rs 10-20 per kg, it means they are mixing the smuggled gas. Former LCCI President & Chairman of LPG Association of Pakistan said that heavy smuggling of LPG from Taftan and Mand borders is causing loss to the government exchequer. He urged the government and FBR to take concrete measures to curb illegal import of LPG from Taftan and Mand borders from where LPG is being smuggled into Pakistan. He also stressed the need to introduce reforms in the Custom department to cope with the menace of smuggling into Pakistan.
    Attached Thumbnails Attached Thumbnails LPG.jpg  

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