Exclusive: Pakistani Finance Minister to Request Deferred Payments for Qatari LNG

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Pakistan’s Federal Finance and Revenue Minister Miftah Ismail speaks during an interview with Reuters at his office in Islamabad, Pakistan June 11, 2022. REUTERS/Salahuddin/File Photo

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  • Pakistan’s foreign exchange reserves dwindle as global fuel prices soar
  • Islamabad seeks third long-term LNG supply deal with Qatar
  • Pakistan requests additional monthly cargo under previous deal

ISLAMABAD, June 11 (Reuters) – Pakistan will seek a deferred payment plan for liquefied natural gas purchased under long-term deals with Qatar, Finance Minister Miftah Ismail said on Saturday, as Islamabad faced with a balance of payments crisis and declining foreign exchange reserves.

Pakistan on Friday unveiled a 2022-23 budget aimed at fiscal consolidation as it tries to convince the International Monetary Fund to revive much-needed financial support. But the lender has expressed concerns over the numbers, including its current account deficit. Read more

“We talked about a deferred payment plan…or at least I asked for that…and the (Pakistani) oil minister is conducting negotiations and is going to conduct talks,” Ismail told Reuters in an interview.

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As it waits for funds from the IMF, cash-strapped Pakistan faces dwindling foreign exchange reserves, sufficient for less than 45 days of imports, and a huge current account deficit – the purchases of dominating its record import bill.

Global energy prices have risen to record highs in recent months amid tight Russian supply and rising demand in Asia.

Oil Minister Musadik Malik, who was in Doha this week for talks with Qatari Minister of State for Energy Affairs and Qatar Energy Managing Director Saad al-Kaabi, confirmed the talks but said his government was exploring different strategies scale “innovative” pricing and procurement. based talks.

“A deferred payment would obviously be hugely beneficial to Pakistan in terms of cash flow, but that’s not the only discussion we have,” Malik said in an audio message, calling the talks “preliminary.”

The Qatari government did not immediately respond to a request for comment.

FUTURE CONTRACTS

In recent years, Pakistan has increased its reliance on LNG for power generation, but faces widespread blackouts as chilled fuel supply remains unreliable and expensive.

Ismail said his government was also talking to Qatar about a new five- or 10-year LNG supply deal for three monthly cargoes, as well as an additional cargo under an existing deal.

Pakistan already has two long-term supply agreements with Qatar – the first signed in 2016 for five shipments per month, and the second in 2021, under which Pakistan currently receives three monthly shipments.

Malik said Qatar was among multiple suppliers Pakistan was talking to for fixed-term contracts as it tried to navigate a “hot” and “expensive” market.

Pakistan tapped the spot market for additional cargo in July to no avail, with two tenders in the past week failing to return valid bids.

Ismail said two other long-term suppliers were unable to meet their contractual supply obligations to Pakistan.

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Reporting by Gibran Peshimam in Islamabad; Additional reporting by Andrew Mills in Doha; Editing by Mike Harrison

Our standards: The Thomson Reuters Trust Principles.

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