PSO seeks approval for Qatar LNG offer at 11.96% of Brent

Pakistan State Oil PSO is seeking government approval to finalise a revised LNG supply arrangement with QatarEnergy by November 3, based on an offered price of 11.96% of Brent for two long-term agreements. Sources said QatarEnergy's latest pricing offer is final, leaving Pakistan to decide whether to accept it.

The agreements, signed in 2016 and 2021, are due to expire in 2031. The proposed arrangement would provide 66 cargoes a year from 2027 to 2031, compared with 108 cargoes under the current agreements. A further 210 cargoes have been deferred over four years beyond 2031.

Pakistan initially sought to reduce the first agreement's price from 13.37% to 10.20% of Brent. QatarEnergy rejected that proposed rate, offered 11.36% for both agreements and later put forward 11.96%. For the second agreement, Pakistan sought to keep the existing 10.20% rate, while QatarEnergy had initially sought 11.98%.

The discussions follow falling LNG demand from the power sector and surplus gas in the domestic transmission system. Both agreements require PSO to meet contractual payments even when domestic demand is lower. Their terms also limit the flexibility to divert surplus cargoes: QatarEnergy receives profits from overseas sales, while PSO bears losses.