The government is likely to strike a long-term gas supply agreement with Qatar in the coming weeks to deal with Pakistan’s chronic energy shortage.
As the country is running out of domestic gas, it has opted for liquefied natural gas (LNG) as an alternative. An LNG supply deal was under discussion with 8 different countries over the past few months.
These countries include Russia, Qatar, Turkey, Italy, Oman, Malaysia, Azerbaijan, and Indonesia. The state-owned Saudi company is also interested in a gas deal with Pakistan, however, Qatar has emerged as a front-runner for the agreement.
According to a senior official, Qatar offered the lowest price for the gas supply. Given the country is already cash-strapped, it’s plausible if the government opts for the cheapest supplier.
The federal cabinet will decide in a week or two whether it will continue with a government-to-government deal or not. Other details like the size of the deal will also turn up.
Notably, Qatar is already Pakistan’s biggest supplier of gas because of a 15-year agreement on the export of up to 3.75 million tons of LNG a year. The deal was struck in 2016 and brought about Pakistan’s first LNG terminal.
Pakistan has surfaced as one of the world’s fastest-growing LNG markets. It needs long-term supply contracts for its second LNG terminal that can ensure 600 million cubic feet per day (mmcfd) of natural gas.