ISLAMABAD    -    Pakistan is all set to finalise $10 billion investment agreement with Saudi Arabia and will also seek the downward revision in LNG prices from Qatar, said Federal Minister for Petroleum Ghulam Sarwar Khan.

Saudi Arabia Crown Prince, Muhammad bin Salman would visit Pakistan next month to sign memorandum of understanding (MoU) on setting up refinery and Petro Chemical complex in Gwadar, said the Federal minister for Petroleum while talking to a selected group of journalists here Monday.

Saudi Arabia has initially committed to provide $10 billion to set up oil refinery with 200,000 to 300,000 tons per day capacity and petro chemical complex in Gwadar. The minister further informed that Prime Minister Imran Khan may also request to provide credit facility for LNG imports and revision in LNG prices during upcoming visit to Qatar. He said that Pakistan’s annual LNG import bill is around $ 4 billion and Qatar is likely to extend LNG credit facility for one year.  

Regarding LNG agreement with Qatar, the minister said that incumbent government wants Qatar to downwards revise LNG prices and in his visit Prime Minister will make a request in this regard. However, he said that government of Pakistan had long term LNG supply agreement with Qatar and they would continue it.

The minister revealed that Energy Minister for Saudi Arabia had also offered Pakistan to export LNG to meet domestic requirements. Many other countries had also expressed their interest to export LNG to Pakistan, the minister said, adding that Japanese Company Mitsubishi is also keen to supply LNG to Pakistan. The interest from different supplies will increase competition in LNG supply which will help getting low prices, Khan said.   

Talking about the recent visit of Saudi Energy Minister to Gwadar, the minister said that the Kingdom had expressed interest to invest in four major areas which include petroleum chemical complex, mineral, industry and renewable energy. Besides, Saudi Arabia had also expressed interest to set up LNG-based power plants in Pakistan.

Ghulam Sarwar Khan said that to boost onshore drilling to address energy crisis, the present government is planning of giving incentives to exploration companies.

Tax exemptions for offshore drilling has already been provided and the government was considering to extend the incentives to the onshore drilling companies as well, said the minister.

Talking about the new energy policy, Khan informed that the process of forming new energy policy is underway and it would be finalized in March. The government would take all stakeholders on board to fine tune the draft of new energy policy. “In this regard meetings were held with chief ministers of Sindh, Balochistan and Khyber Pakhtunkhwa to take them on board,” he added.

He said that offshore drilling had started in the country and the government wanted the exploration companies to start exploration work on two blocks in Balochistan.       

Regarding the policy on new gas development schemes, the minister said that cabinet had discussed the policy on new gas development schemes. All three gas producing provinces had first right on gas utilization under article 158 and they were not ready to provide gas supply to other provinces. Petroleum minister said major chunk of gas is being produced in other three province while the demand of gas in Punjab province was higher. He said that government was working on comprehensive energy policy to address all these issues. Countries like UAE, Saudi Arabia and Qatar had gas but they don’t use it for domestic consumption and are consuming LPG, he maintained. Pakistan was only country in the region where consumers had luxury of pipeline gas. ‘There is no rational to increase network of pipeline gas, he added.

On the issue of reconstituting Board of Directors of the oil and gas companies, the minister said that government had decided to reconstitute board of directors of oil and gas companies through advertisement. He said that government was going now to advertise the post of board of directors who would initiate process of hiring new heads of oil and gas firms. “We are going to advertise the post of board of directors in line with the advice of Law Division,” the minister said. The policy is in line with the Supreme Court Decision of hiring the boards of directors through advertisement, he claimed.