Page 9 - GLNG Week 26 2022

GLNG COMMENTARY GLNG

Fund (IMF) to secure a much-needed bailout.
The Pakistani government reportedly needs at a potential gas supply agreement with Russia,
least $41bn in the next 12 months in order to get which has been selling oil and gas to Asian buy-
through the economic crisis. And the high cost ers even as its energy exports are being shunned
of fuel is starting to hit consumers. by – primarily – Western countries.
Abbasi also said the government was open to
What next? signing a 30-year contract in an effort to secure
The government is now trying to conserve supplies for an even longer period. LNG supply
energy where possible, and has cut working agreements currently rarely exceed 20 years, so
hours for public servants, introduced planned such a deal would be unusual if Islamabad man-
blackouts and ordered certain businesses in aged to strike one.
cities including Karachi to shut early. Pakistani It also remains to be seen how attractive the
Prime Minister Shehbaz Sharif pledged this prices that Pakistan wants for a long-term supply
week to take further steps to end blackouts. deal will be to potential sellers. This has not been
Additionally, it was reported earlier this specified, but Abbasi said the government would
month that the country was seeking to sign a retain a clause allowing sellers to pay a 30% pen-
new long-term LNG purchase deal in an effort alty if they cannot deliver a shipment.
to secure gas supplies and ease the power short- This clause is present in existing deals, and
ages. Shahid Khaqan Abbasi, a former Pakistani indeed has recently been used by Eni and Gun-
prime minister who now oversees the energy vor Group, which have both cancelled several
sector for Sharif, told Bloomberg at the start scheduled cargoes to Pakistan in the past year,
of June that the government intended to float exacerbating energy shortages in the country.
a tender to purchase one cargo per month of No further information has emerged since
LNG for 10-15 years. At the time, the govern- early June on any progress towards a long-
ment had yet to decide the timeline for issuing term supply deal. News could come soon, and
the tender. According to Abbasi, Islamabad a long-term supply agreement would certainly
intended to speak with LNG suppliers in the be helpful to Pakistan at this time. But as Europe
Middle East, including Qatar, the United Arab accelerates efforts to phase out imports of Rus-
Emirates (UAE), Saudi Arabia and Oman about sian gas, competition for long-term supply will
a potential long-term contract. Separately, the also be high, and this could complicate attempts
government said recently it was not ruling out to negotiate a deal.™

Week 26 01•July•2022 www. NEWSBASE .com P9