Pakistan seeks cheaper LNG, fewer cargoes in talks with Qatar

Pakistan has invoked price-review clauses in two long-term liquefied natural gas (LNG) supply agreements with Qatar, seeking lower prices and fewer annual cargoes as it negotiates additional supplies for the coming winter.

ISLAMABAD: Pakistan has invoked price-review clauses in two long-term liquefied natural gas (LNG) supply agreements with Qatar, seeking lower prices and fewer annual cargoes as it negotiates additional supplies for the coming winter.

A Pakistani delegation led by Petroleum Minister Ali Pervaiz Malik arrived in Qatar on Tuesday for talks with QatarEnergy on revising the agreements, securing immediate supplies for the winter months and finalising the 2027 annual delivery plan, according to officials quoted by The News.

The price-review clauses require the two sides to assess the existing pricing formula against comparable LNG contracts and industry publications and, if necessary, adjust it to reflect market conditions.

Pakistan is seeking one LNG cargo for November and four to five each for December and January. Its estimated requirements are nine cargoes for December and 11 for January, according to official sources cited by the newspaper.

The negotiations come amid disruptions to LNG shipments through the Strait of Hormuz and force majeure restrictions declared by QatarEnergy until the end of December. One cargo bound for Pakistan was affected before entering the strait, despite receiving clearance from Iranian authorities, the sources said.

Shipments from Qatar have reportedly recovered to around half their pre-war levels, prompting Islamabad to seek additional supplies from Doha to meet domestic demand during the winter.

Pakistan initially sought to reduce the price under its first LNG agreement from 13.37 per cent to 10.20 per cent of the Brent crude benchmark. QatarEnergy rejected that specific proposal but subsequently offered a rate of 11.36 per cent of Brent for both agreements.

Pakistan also sought to retain a rate of 10.20 per cent of Brent under the second agreement. QatarEnergy initially sought 11.98 per cent before making a final offer of 11.96 per cent for both contracts, the sources said.

QatarEnergy has finalised its offer, leaving Pakistan to decide whether to accept the revised pricing arrangement or continue negotiations. Pakistan has also sought to reduce its annual commitments from 108 LNG cargoes to 66, according to the report.

Separately, the board of state-owned Pakistan LNG Limited (PLL) rejected bids from TotalEnergies and QatarEnergy Trading for two spot LNG cargoes intended for delivery in December and January, following a review under applicable Public Procurement Regulatory Authority rules.

TotalEnergies submitted a bid of Rs24.434 billion for a December cargo of 140,000 cubic metres and Rs24.282 billion for a January cargo. QatarEnergy Trading submitted a bid of Rs27.776 billion for the December cargo.

The PLL board decided to reject the offers after examining them, the report said.