Italy Expected To Sign LNG Supply Deal With Pakistan
Tuesday, May 10th, 2016 10:09:11 by modousarr
According to officials, Pakistan and Italy are most likely to enter a government-to-government deal for the supply of liquefied natural gas (LNG) as Eni, an Italian firm has offered to provide Pakistan gas.
The firm has been involved in exploration activities in Pakistan and has been working long since. It has now relayed to the Pakistan government its inability to continue exploring oil and gas as a profitable business and desires to export LNG.
“For this purpose, Eni has taken the Italian government on board and says it will sign a deal for LNG supply on a government-to government basis,” an official said.
It claimed that it would be able to provide 3 million tons of LNG per year. The government-to-government deal signed by Pakistan and Qatar was sent over to Italy for examination.
Pakistan is of the opinion that it has created a model LNG agreement that will be proffered to other countries. It waits for the Italy’s response.
The official further stated that the Pakistani government highlighted certain benchmark prices as agreed with Qatar and Gunvor, which 13.37% of the price of Brent crude oil. As a result, no deal can be signed with an amount over this price.
Currently, Pakistan is a recipient of LNG from two sources. The Qatari state companies, is the first source, as they signed a long-term LNG supply deal. The second source is Gunvor which received a contract to provide 60 ships.
Every month, the country receives three ships from Qatar and one vessel from Gunvor.
The overall supply is at 300 million cubic feet per day (mmcfd) from Qatar and 100 mmcfd from Gunvor. Prices for both supply sources are at 13.37% of the Brent oil rate.
A pipeline capacity that could supply 400 mmcfd of gas is owned by gas distribution companies. They are presently working on placing new 42-inch pipelines to transport 1.2 billion cubic feet of gas per day. These efforts should be completed by December 2017.
Due these developments, it is preferable for Pakistan to sign deals with more potential suppliers of LNG.
Based on the official’s statements, the government is in negotiations with a Malaysian firm that has offered to provide three million tons of LNG per year. This company, however, cannot supply gas immediately but promises to do so in 2018.
China has also offered to supply the LNG to Pakistan.
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