Pakistan Asks India to Remove Duties on LNG Export

[2013-06-19 09:39:58]


"We have asked India to exempt LNG export from taxes, which may bring its price down to $16 per mmbtu, but India has not yet given any assurance," a source quoted officials as saying.

During recent talks held in Pakistan, India had sought $21 per million British thermal units (mmbtu) for LNG export, including taxes applicable on the fuel in India, sources say.

Pakistan has been attempting to import LNG from different sources, including the Sui Southern Gas Company's integrated LNG import project and imports from gas-rich Qatar.

"We have asked India to exempt LNG export from taxes, which may bring its price down to $16 per mmbtu, but India has not yet given any assurance," a source quoted officials as saying.

During recent talks held in Pakistan, India had sought $21 per million British thermal units (mmbtu) for LNG export, including taxes applicable on the fuel in India, sources say.

Pakistan has been attempting to import LNG from different sources, including the Sui Southern Gas Company's integrated LNG import project and imports from gas-rich Qatar.

Though India had inked a supply agreement with Qatar back in 2004, Pakistan had tried and failed to secure a similar deal way back in 1991, the official said.

During its five-year term, the PPP government tried to revive the Qatar LNG project, but failed to convince Doha, which told Islamabad to negotiate and strike a deal with US firm Conocophilips, which operates its northern fields. Qatar even made a revised price offer as the PPP government approached the end of its tenure.

The cabinet, however, did not take a decision and left the matter to be decided by the next government.

According to the proposal placed before the cabinet, Qatar quoted a price of $17.437 per mmbtu, a 0.5% discount over its previous offer of $18.002 per mmbtu, which would lead to $1 billion in savings over the 20-year life of the project.

The price, however, does not include the capital cost of building an LNG terminal and other charges, import expenses and re-gasification, wastage and shipping costs. These additional costs will add about $2.084 to the quoted price.

In the tender for SSGC's gas import project, Pakistan Gas Port had quoted a price of $17.7074 per mmbtu, while Global Energy International had offered a rate of $18.16 per mmbtu. Engro's wholly-owned subsidiary Elengy Terminal Pakistan submitted a formula instead of a base price. The price also covered the cost of setting up a terminal to handle imports.

"If the government reaches a deal with Qatar at the revised price, Pakistan will be paying annually an extra $3.5 billion than it will pay to private suppliers that participated in SSGC's LNG tender," the government official said.
Source: Tribune.com.pk
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