![]() ![]() The petroleum ministry had also proposed that “PSO should be exempted from any arrangement under which they have to get the LNG re-gasified and that they shall have no responsibility for blending or dilution” even though it is required under the LNG Policy 2011. “Ogra be directed to in this regard (to include this new element in price) and to approve the terms of SPA,” the petroleum ministry pleaded. Port charges for QG2 are estimated at about $700,000. Moreover, port charges in excess of $320,000 (being the maximum payable by QG2 under the SPA) will be paid by PSO and will form part of price of RLNG or swapped gas as determined by Ogra and notified by PSO. In case off-spec LNG is delivered where neither PSO nor seller was aware that LNG was outside specification, then subject to the conditions the cap on liabilities is 25pc for the seller. Moreover, “the SPA is a take or pay contract and as such PSO will be liable to pay for all the quantities as per the contract” although some mitigating provisions were also part of the agreement.Ĭonversely, “the seller liabilities under the contract are capped at 20pc in case of non-delivery of LNG or where off-specification LNG is delivered and is accepted by PSO, subject to the fact that the costs are reasonable and incurred by PSO or billed by the gas companies”, the ministry reported. It said that “the price of LNG is pegged with oil prices and is priced as a direct percentage of Brent and under current rates the value of potential LNG supply under the SPA is about $16bn”. The summary also reported the LNG supply contract with QG would be on a government-to-government basis for 15 years. PSO and the petroleum ministry requested the ECC to direct the regulator to allow port charges beyond $320,000 to become part of RLNG. However, the Qatar authorities now wanted LNG supplies through Qatar Liquefied Gas Company 2 (QG2) whose port charges would be on the higher side. These charges were approved by Oil and Gas Regulatory Authority (Ogra) in its regasified-LNG (RLNG) price early last month at $8.64 per million British Thermal Units (mmBtu). In its summary to the ECC, the petroleum ministry had requested the government to sign the agreement on the basis of ‘take or pay’ liability on Pakistan and 20pc liability on LNG supplier for its failure or off-specification supplies.Īlso, the ministry stated that under the original sales and purchase agreement (SPA), the Qatar Liquefied Gas Company Limited 3 (QG3) was to pay port charges at a minimum of $320,000. Some critical liabilities of Qatargas would, however, now rest with the local companies and consumers. The sources said PSO also signed an agreement with Gunvor on Wednesday in Karachi for five years at 13.37pc of Brent. PSO and the petroleum ministry had previously initialled an LNG rate of 13.9pc of Brent which was considered on the higher side by majority of the energy sector experts. On Wednesday, the ECC gave a go-ahead when it was informed that Qatargas had agreed to reduce LNG price to 13.37 per cent of Brent to match a bid received from Russian firm Gunvor for five years.ĮCC approves export of 600,000 tonnes of wheat with Rs3.5bn subsidy The ECC had been dragging feet to approve the LSPA with Qatar because of difference of opinion over its legalities and higher prices offered by Qatar. The decision was taken at a meeting of the Economic Coordination Committee (ECC) of the Cabinet presided over by Finance Minister Ishaq Dar which also allowed export of 600,000 tonnes of wheat at about Rs3.5bn subsidy. ISLAMABAD: Finally, the government on Wednesday allowed Pakistan State Oil (PSO) to sign LNG Sale Purchase Agreement (LSPA) with Qatargas for import of liquefied natural gas (LNG) of around $16 billion in 15 years at a relatively lower rate. ![]()
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