ISLAMABAD: Pakistan has invoked price-review provisions in two government-to-government liquefied natural gas supply agreements with Qatar as it seeks cheaper gas, reduced annual cargo commitments and a renegotiated pricing formula, while also requesting emergency supplies for the peak winter months of December and January.
A high-level Pakistani delegation led by Federal Minister for Petroleum Ali Pervaiz Malik arrived in Qatar on Tuesday to negotiate with QatarEnergy on revising the long-term supply agreements, immediate winter supplies and the annual delivery plan for 2027, local media reported.
The delegation includes Lt. Gen. Muhammad Zafar Iqbal (retired), special assistant to the prime minister, Petroleum Secretary Hamed Yaqoob Sheikh and other officials.
The price-review clause requires both sides to review and, if necessary, adjust the pricing formula so the contract price falls within the range of prices under comparable LNG contracts, regardless of supply source. The review is to be benchmarked against comparable contracts and reputable industry publications.
Pakistan is seeking one LNG cargo for November and four to five cargoes each for December and January, though its overall requirements stand at nine cargoes for December and 11 for January.
The negotiations come amid disruptions to LNG transportation through the Strait of Hormuz and force majeure restrictions imposed by QatarEnergy through the end of December. One LNG cargo destined for Pakistan was affected before entering the Strait of Hormuz despite clearance from Iranian authorities.
With LNG transportation from Qatar reportedly recovering to about half of pre-war levels, Islamabad hopes to persuade Doha to meet its immediate needs and maximize supplies this winter.
Pakistan earlier demanded a reduction in the price under its first LNG contract from 13.37% to 10.20% of Brent crude. QatarEnergy rejected that demand but offered a reduced price of 11.36% applicable to both agreements.
Pakistan also sought to retain the price at 10.20% of Brent under the second contract for all future supplies. QatarEnergy demanded an increase to 11.98% and ultimately presented a final offer of 11.96% of Brent for both agreements.
QatarEnergy has finalized its offer and Pakistan must now decide on the revised pricing arrangement, which is part of a multibillion-dollar LNG supply deal. The offered price remains higher than Pakistan's demand, leaving the government to decide whether to accept or continue negotiations. Pakistan has also sought 66 cargoes instead of 108.
In addition to lower prices, Pakistan is seeking a substantial reduction in annual cargo commitments to align contracted supplies with declining domestic consumption.
Meanwhile, the government rejected bids submitted by TotalEnergies and QatarEnergy for two spot LNG cargoes scheduled for delivery in December and January after a review by the board of Pakistan LNG Limited.
TotalEnergies submitted two bids, offering 24.434 billion rupees for a December cargo of 140,000 cubic meters and 24.282 billion rupees for a January cargo. QatarEnergy submitted one bid of 27.776 billion rupees for the December cargo, the highest. The PLL board rejected the bids under applicable Public Procurement Regulatory Authority rules.
