Qatar Petroleum has entered into a new long-term sale and purchase agreement with Pakistan State Oil (PSO) for the supply of up to 3 million tonnes per annum of liquefied natural gas (LNG) to Pakistan.
Under the 10-year agreement, LNG deliveries to Pakistan’s world-class receiving terminals will commence in 2022 and continue until the end of 2031. Financial details of the SPA were not divulged.
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Pakistan currently has two operational LNG receiving and regasification facilities, the Engro Elengy and Pakistan GasPort floating storage and regasification unit-based projects - both moored at Port Qasim. Also, there are a number of further terminals under consideration by various private sector players in the country.
“This agreement further extends Qatar’s long standing LNG supply relationship with Pakistan and highlights our commitment to meeting Pakistan’s LNG requirements,” said Qatar Petroleum chief executive Saad Sherida Al-Kaabi.
“We are confident that the exceptional reliability of our LNG supplies will provide PSO with the required flexibility and supply security to fuel Pakistan’s impressive growth.”
This is the second such deal signed between Qatari and Pakistani entities following Qatargas’ 2016 long-term agreement to supply PSO with 3.75 million tpa of LNG.
While detailed terms of the latest SPA are being kept under wraps, PSO earlier said in its Qatargas' contract the LNG price is linked with the international benchmark Brent price and it tracks the prior three months' average value of Brent, which is built into the formula for calculating the LNG price.
Al-Kaabi added that with a well-established gas market and distribution system, Pakistan is a strategically important market for Qatar LNG.
“We are encouraged by Pakistan’s exceptional growth and excellent economic potential as well as by the prospect of it being one of the world’s fastest growing LNG markets,” he said.