PPP Senators Criticise ‘Faulty’ LNG deal

The government came under severe criticism on Thursday from senators belonging to the PPP over what they called a faulty LNG deal. 

At a meeting of the Senate Standing Committee on Petroleum and Natural Resources, presided over by its chairman Israrullah Khan Zehri, Petroleum Minister Shahid Khaqan Abbasi faced a barrage of questions, but he accused the media of scandalising the deal.

Shahid Khaqan Abbasi
Shahid Khaqan Abbasi PPP Senators Criticise ‘Faulty’ LNG deal

Saeed Ghani of the PPP said the LNG terminal had been operational for over five months, but no contract had been signed with Qatar.  He said several key personalities had resigned over the issue. Mr Ghani said the chiefs of the Sui Northern Gas Pipelines Ltd and the Central Power Purchase Agency, as well as the head of the legal department of the Private Power Infrastructure Board, had resigned in protest against the government’s LNG policy. “How can you still claim that things are going smoothly?” Mohammad Yousaf, also of the PPP, said Pakistan was buying LNG at a spot rate of around $8 per Million British Thermal Unit (mmbtu) while Japan was importing it from the same country at $7.35 per mmbtu. “I do not know the distance between the two countries but a ship takes 22 days to reach Japan from Qatar while it reaches Pakistan in only three days.” He asked the minister: “Is there any group or a cluster of dealers which are creating hurdles in striking a deal with Qatar at a competitive price, or some officials are involved in taking commission at spot purchases.” 

The petroleum minister said all hurdles had been removed and the deal would be signed soon. “Everything is at the final stage for signing a contract with Qatar, but the Oil and Gas Regulatory Authority has yet to approve the LNG prices,” he said, adding that the LNG supply deal with Qatar would be the best in entire Asia. He claimed that the LNG terminal toll was 66 cents per mmbtu, which was the lowest in the world. Mr Abbasi said Japan imported LNG from Qatar at $7.35 per mmbtu, but “I can assure the committee that import is possible at less than $7 per mmbtu”, keeping in view the current international oil prices. He said Pakistan would save $2 billion per annum if all oil-based plants were replaced with LNG. The minister claimed that LNG would prove to be a game-changer in the energy sector because local gas production had declined to 3.8bn cubic feet per day after remaining stagnant at four billion cubic feet per day for almost a decade.