New Delhi, March 21 (IANS) Pakistan will continue to pay over $15 million a month in capacity and utilisation charges to its LNG terminals even after QatarEnergy declared force majeure earlier this month, according to a new report.
According to the report by The News International, Pakistan is making daily payments of about $538,535 to the two terminals despite the suspension of LNG production from March 2.
Federal Minister for Petroleum, Ali Pervaiz Malik, reportedly criticised the agreements, describing them as faulty and not in the country’s interest.
Pakistan, which has imported LNG worth around $35 billion so far, paid nearly $3 billion in capacity charges alone.
In response to the force majeure declared by QatarEnergy, several state-run entities -- Pakistan State Oil, Sui Southern Gas Company, Sui Northern Gas Pipelines Limited and Pakistan LNG Limited -- have also invoked superior force clauses in their contracts, the report mentioned.
However, agreements with private LNG terminal operators still require uninterrupted payments in US dollars even when supply is halted and regasification does not take place.
As a result, Pakistan remains obligated to make payments without receiving gas, highlighting a major structural weakness in long-term LNG terminal contracts, officials said.
The report also noted that the payments are adding to financial pressure on the country at a time when its external account position remains fragile.
Earlier, another report highlighted that economic fragility in the neighbouring country has reached a critical stage following the US–Israel war with Iran due to a significant jump in oil prices and the surge in the trade gap.
Moreover, Pakistan’s economic fragility is reflected in its GDP growth rate, which is merely 3.1 per cent and its human development index (HDI) rank is 168 on a list of 193 countries, per capita income of $1,812, a poverty rate of 28.9 per cent, an adult literacy rate of 60 per cent, 25.2 million out-of-school children, and an unemployment rate for ages 15–24 of 12.8 per cent, the article stated.
--IANS
ag/na