No more 20-hour cuts? Qatar, Pakistan seal 15-year gas supply deal

Published February 19th, 2015 - 04:55 GMT

State-run Gulf energy company Qatargas is in the final stages of talks on a deal to supply Pakistan with three million tonnes of liquefied natural gas (LNG) annually for 15 years, industry sources in Doha told Reuters on Wednesday.

The deal would help Pakistan tackle serious energy shortages and power cuts which can last up to 20 hours a day. Nearly half the country’s electricity is generated by gas and its output of 4.1 billion cubic feet per day is well short of demand for as much as 6 billion, depending on the time of year.

One source said the deal would be signed in weeks, while a second said the first shipment would be received by March.

An official at Pakistan’s Ministry of Water and Power confirmed an LNG deal was planned but declined to give details. No-one at Qatargas, the world’s largest LNG producer, was available to comment.

State-owned fuel importer Pakistan State Oil (PSO) said payments to Qatar would be guaranteed by the Pakistani government so any cash flow problems at PSO would not affect the Qatargas deal. “These discussions are still ongoing,” he told Reuters when asked about the deal.

PSO frequently suffers severe cash flow problems due to payment delays from its customers. It was forced to slash petrol imports by half in January and stop fuel oil imports altogether. A spokesman for the company said the situation was now resolved.

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