(21 September 2015)
Pakistan Businessmen and Intellectuals Forum (PBIF) on Monday expressed serious concern over looming deadline by Qatar to finalise LNG deal up to Sept 30th after which the supply arrangement will stand cancelled.
The cancellation of long term deal would be a great blow to Pakistan as it will inflict losses of billions, said PBIF President and former provincial minister Mian Zahid Hussain.
Pakistan took 18 months in constructing LNG terminal and it hasn’t resolved related issues in the last seven months which include insistence of Qatar’s state-run company Qatar Gas on tripartite agreement between PSO, SSGC and SNGPL, Gas Sales Agreement between SNGPL and IPPs, proper payment mechanism in the form of standby letter of credit.
Mian Zahid Hussain said that cancellation of arrangement will leave Pakistan with only spot purchase option which will be expensive and will not go down well with Ogra, PPRA and other institutions.
Moreover, the financial health of PSO is enough to scare away suppliers as recently Swiss supplier Gunvor withdrew from spot deal.
If failed, he said, Government will have to pay 272000 dollars per day to terminal operators which will swell to over 10 billion rupees in one year while dozens of planned LNG-based power plants, fertiliser sector, and Punjab’s LNG industry will suffer.
It will also pave way to increased oil import bill, enhanced load shedding, gas crisis and unemployment, he added.
Oil mafia continue to hurt LNG project while IPPs are not ready to pay more than Rs 488 per mmbtu while SNGPL cannot supply RLNG below Rs 1300 per mmbtu.
It is also amazing that a gas company is not ready to support the deal, one MD has resigned while his successor has also refused to sign the three party agreement.
So far, Government has been unable to handle the LNG terminal therefore it should reconsider constructing the second one.
