It seems that LNG is here to stay despite the reservations held by many over the mammoth deal with Qatar. Prime Minister Nawaz Sharif arrived in Doha and held a meeting with Emir of Qatar Sheikh Tamim bin Hamad bin Khalifa Al-Thani, after which were inked several Memorandums of Understanding (MoU) including one for the import of Liquefied Natural Gas (LNG).
Under the new mega deal worth $ 15 billion, Pakistan will buy LNG from Qatar at 13.37% of Brent crude price, which amounts to $4.680 per million British thermal units (mmbtu) when oil is sold for $35 per barrel. This also includes port charges of $320,000 per vessel. If nothing else, the low price renegotiated upon can be counted as an achievement for the Nawaz Government who have put their weight behind the deal despite massive criticism on the import of LNG and followed it through.
The LNG scandal that took place prior to the Pakistan-Qatar LNG deal has to an extent tainted the success of this one. The government had earlier planned on buying LNG at inflated prices in order to tackle the energy crisis, which would have cost Pakistan $ 5 million per day according to the Pakistan Economy Watch (PEW) officials. This deal would have caused a 200 percent increase in gas prices for the end users, many of which refused to buy it when it was to be imported earlier.
Considering other reasons for the dissent over the Qatar LNG deal, including hiding the price that was being negotiated from the National Assembly, the deal was finalised in the end without much opposition. The National Accountability Bureau (NAB) has also expressed its satisfaction on the transparency of the deal. Let us hope that this deal really does usher in a new era for Pakistan in terms of energy availability and does not become a tool for the government to benefit from on the side.