Indian LNG Price to Pakistan Higher Than That of Qatari LNG

Pakistan has been offered a price between $18 and $20 per Million British Thermal Unit (mmbtu) excluding transportation charges by India for supply of LNG. This is higher than the $18 quoted by Qatar and much higher than the $11 offered by Dutch firm 4Gas in January 2011.

India has demanded to link LNG price with furnace oil while another proposal was to link it with Brent crude oil price, an official familiar with the matter told The Express Tribune.

“LNG price comes to $18 to $20 per mmbtu if it is linked with the current furnace oil price,” a government official said. The official further said that furnace oil is 20% cheaper than crude oil.

The price does not include transportation charges, which will be carried through a pipeline from Bhatinda to the Wagah border.

India will lay a 60-kilometre pipeline from Bhatinda to Wagha border whereas the Pakistani government would lay 30 kilometre pipeline to inject gas into the system of Sui Northern Gas Pipeline Limited (SNGPL), the newspaper report said.

Pakistan is expected to import 200 million cubic feet gas per day (mmcfd) initially with the option of increasing supply in the long run.

“LNG import from India is the most viable option at the moment as there will be no capital cost involved and supply can start within months of the deal,” an official said adding that if the government imports LNG through Karachi, the cost of just laying a pipeline from Karachi to Lahore will be $1.4 billion.