LNG deal for Pakistan

A research by USAid had concluded that Pakistan has one of the World’s largest natural gas deposit that can make the country a net LNG exporter. But one year later the Pakistan Government signed an expensive and very long LNG contract with the Qatari family at a time when global LNG supply was heading towards excess and prices of LNG are to fall further.

Interestingly at the time of LNG signing the heads of the Government organizations that did not agree to this expensive and useless deal were all mysteriously replaced. Infact the company that were installing the first terminal of LNG, Engro, had their CEO hired as the CEO of PSO at 10 million monthly pay by the minister of Petroleum. This is the highest salary of any Government and even private companies in Pakistan.

Another dangerous aspect was the two Qatari letters that were presented in the Panama case that highlighted that Nawaz Sharif’s family have business dealings with the Qatari family since decades and the Government of Pakistan did not even hold a tender to get the best price but instead went for direct negotiations, which is against the procurement rules and due to the family link this deal has “conflict of interest” written all over it.

It has been reported that Italian and Iranian companies had offered lower prices but we’re not entertained. The LNG price negotiated by Pakistan only benefits 3 sectors, fertilizer, cement and CNG but this benefit will disappear once the price of Brent increases as than local natural gas will be cheaper and these companies will reduce the use of imported LNG. In that case the Government would have to either increase local natural gas price or forcefully supply expensive LNG to local consumers at high rates.

In all cases the LNG deal between Qatar and Pakistan only benefits a handful of people while it puts the rest of Pakistan at risk of future hikes in their energy cost. Why should a few benefit at the expense of the entire nation of Pakistan? Can no organization of Pakistan strong enough to stop this high handedness of one Royal Qatari family and one lifetime Royal PMLN democratic family.

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