Pakistan to Notify Gas Tariff Semi-Annually

Pakistan has decided to resume semi-annual notification of gas tariff in the wake of increased imports of LNG.

The decision came after Islamabad held talks with IMF regarding the 11th review of a three-year, $6.4 billion Extended Fund Facility (EFF) signed in September 2013.

The semi-annual notification of gas tariff, authorities believe, will ensure cost recovery and strengthen the regulatory framework, Dawn, a local newspaper reported.

The government is trying to fill the gas supply shortfall by increasing the imports of LNG. Earlier this year, Pakistan signed its first long term deal with Qatar. As per the deal signed in February, Qatargas will supply fuel to Pakistan State Oil (PSO) from 2016-2031. The price for each LNG cargo in a particular month has been agreed at 13.37 percent of Brent where Brent value is average of the preceding three months. Qatargas will supply 3.75 million tonne per annum (MTPA) of LNG to PSO. The 15-year long term deal is the largest deal of first quarter 2016, a report by GlobalData suggests. The deal has been estimated to be worth $16 billion.

Last month, private sector entity Global Energy Infrastructure Limited inked a long term deal with Qatargas.

To ease the LNG import process, authorities are keen to develop necessary infrastructure. Earlier this week, state-owned Pakistan LNG Terminals Limited (PLTL) signed an operations and services agreement (O&SA) to establish country’s second LNG import terminal. The agreement was signed between PLTL and Pakistan GasPort Consortium Limited (PGPC), which includes Fauji Oil Terminal and Distribution Company Limited (FOTCO), on July 1, 2016.

Pakistan’s first LNG import terminal has been functioning since last March. Engro Corp currently operates Pakistan’s first FSRU through Engro Elengy Terminal Private Limited (EETPL).