• 4 minutes Europeans and Americans are beginning to see the results of depending on renewables.
  • 7 minutes Is China Rising or Falling? Has it Enraged the World and Lost its Way? How is their Economy Doing?
  • 13 minutes NordStream2
  • 1 day Monday 9/13 - "High Natural Gas Prices Today Will Send U.S. Production Soaring Next Year" by Irina Slav
  • 14 mins California to ban gasoline for lawn mowers, chain saws, leaf blowers, off road equipment, etc.
  • 7 hours "Here is The Hidden $150 Trillion Agenda Behind The "Crusade" Against Climate Change" - Zero Hedge re: Bank of America REPORT
  • 35 mins "A Very Predictable Global Energy Crisis" by Irina Slav --- MUST READ
  • 4 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 1 day Two Good and Plausible Ideas about Saving Water and Redirecting it to Where it is Needed.
  • 2 days An Indian Opinion on What is Going on in China
  • 5 hours Can Technology Keep Coal Plants Alive and Well?
  • 1 day Succession Planning in Human Resources for Vaccinated Individuals in the Oil & Gas Industry
  • 3 days Perfect Energy Storm in Europe: turning our back on fossil fuels is easier said than done!
  • 3 hours Storage of gas cylinders
  • 3 days Nord Stream - US/German consultations
Inflation Fears Hit Fever Pitch As Gas Rally Continues

Inflation Fears Hit Fever Pitch As Gas Rally Continues

With natural gas prices climbing,…

The New ‘Energy Islands’ Of The North Sea

The New ‘Energy Islands’ Of The North Sea

Artificial energy islands are gaining…

Tim Daiss

Tim Daiss

I'm an oil markets analyst, journalist and author that has been working out of the Asia-Pacific region for 12 years. I’ve covered oil, energy markets…

More Info

Premium Content

This Fast Growing LNG Market Is Scrambling For New Supply

A senior Pakistani official said a few weeks ago that Qatar had emerged as the front runner for a long term liquefied natural gas (LNG) supply deal with the country. Qatar already has a 15-year LNG supply agreement in place with Pakistan to export up to 3.75 million tons per annum (mtpa) to the South Asian country of some 200 million people. That 2016 deal supplied Pakistan’s first LNG terminal.

However, after the deal was reached, growing criticism mounted from Pakistani politicians that claim the country received unfavorable contractual terms from Qatar. A Pakistani governmental audit in 2018 reached a similar conclusion, claiming that the price – 13.37 percent of the average price of Brent oil futures for the preceding three months negotiated with Qatar was at a higher rate than trading companies were offering in the open market.

On January 21, Pakistani Prime Minister Imran Khan traveled to Doha to seek a possible price renegotiation, including a one-year credit facility to defer payments to help ease the country’s balance of payments crisis. Khan did not, though, press for a reduction in contractual prices, but only requested an early review of LNG prices after a period of five to seven years, instead of the contract’s 10 years.

Growing gas demand

Pakistan is one of the world’s fastest growing LNG markets and is still looking to secure long-term supply contracts for its second LNG terminal, which can receive 600 million cubic feet per day (mmcfd) of natural gas. The country recently signed a five-year import deal with commodity trader Gunvor and a 15-year agreement with Italian energy company Eni but is also seeking long-term agreements for about 400 mmcfd.

Pakistan has been negotiating with eight countries with whom it has signed inter-governmental agreements in recent years, including Qatar, Russia, Turkey, Italy, Oman, Azerbaijan, Malaysia, and Indonesia. A Saudi Arabian delegation representing state-owned oil major Saudi Aramco has also shown interest in a gas deal with Pakistan. A Pakistani official told Reuters recently that state-run Qatargas put forward the lowest bid for a long-term LNG supply contract that would have a price review after five or 10 years.

Pakistan’s debt woes

Pakistan must secure energy in order to reduce blackouts and chronic power outages that have hindered economic growth, and LNG imports provide an appealing opportunity. That said, the move is politically charged, with complaints about high prices and corruption. As such, the country’s ambitions to procure LNG is encountering headwinds. Pakistan is facing a mounting debt problem, and dwindling foreign reserves, all making it harder to pay for necessary imports. As a result, the Pakistani government received a $6 billion bail-out from the International Monetary Fund (IMF) last week and has also stepped up efforts to raise funds from several Arab nations – and China.

Qatar flexes its LNG muscles

The new Pakistani deal with Qatar, moreover, shows that Doha is still pressing ahead to maintain its lead as the top global LNG exporter, even as Australia temporarily bypassed the kingdom in LNG exports last year. In November, Australia shipped 6.7936 million tons of LNG, while Qatar exported 6.2025 million tons.

However, going forward, Qatar will solidify its hold as the world’s top LNG exporter as it develops more gas in its prolific North Field and builds more infrastructure to increase its current liquefaction capacity from 77 mtpa to an impressive 110 mtpa within five years, likely far outpacing its closest rival Australia, the U.S., and Russia. The U.S., for its part, will see its so-called second wave of LNG development largely thwarted if Washington and Beijing prolong existing trade tensions since a considerable number of smaller greenfield LNG projects in the country need both Chinese financing as well as signing long term off-take agreements with Chinese firms.

By Tim Daiss for Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News