Identifier
Created
Classification
Origin
10ISLAMABAD182
2010-01-26 06:31:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Islamabad
Cable title:
PAKISTAN'S PETROLEUM MINISTER ON IMPORTED LNG
how-toVZCZCXRO7683 OO RUEHLH RUEHPW DE RUEHIL #0182/01 0260631 ZNR UUUUU ZZH O 260631Z JAN 10 FM AMEMBASSY ISLAMABAD TO RUEHC/SECSTATE WASHDC IMMEDIATE 7047 INFO RUEHBUL/AMEMBASSY KABUL PRIORITY 1409 RUEHLO/AMEMBASSY LONDON PRIORITY 2248 RUEHNE/AMEMBASSY NEW DELHI PRIORITY 6019 RUEHKP/AMCONSUL KARACHI PRIORITY 2818 RUEHLH/AMCONSUL LAHORE PRIORITY 8418 RUEHPW/AMCONSUL PESHAWAR PRIORITY 7478 RUEAIIA/CIA WASHINGTON DC PRIORITY RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC PRIORITY RUCPDOC/DEPT OF COMMERCE WASHINGTON DC PRIORITY RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY RHEBAAA/DEPT OF ENERGY WASHINGTON DC PRIORITY RHMFISS/HQ USCENTCOM MACDILL AFB FL PRIORITY RUEKJCS/JOINT STAFF WASHINGTON DC PRIORITY RHEHNSC/NSC WASHINGTON DC PRIORITY RUEKJCS/SECDEF WASHINGTON DC PRIORITY RUMICEA/USCENTCOM INTEL CEN MACDILL AFB FL PRIORITY
UNCLAS SECTION 01 OF 02 ISLAMABAD 000182
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: EFIN ECON ENRG PK
SUBJECT: PAKISTAN'S PETROLEUM MINISTER ON IMPORTED LNG
REF: 09 ISLAMABAD 2665
UNCLAS SECTION 01 OF 02 ISLAMABAD 000182
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: EFIN ECON ENRG PK
SUBJECT: PAKISTAN'S PETROLEUM MINISTER ON IMPORTED LNG
REF: 09 ISLAMABAD 2665
1. (SBU) Summary: The GOP has nearly completed a deal to
import liquefied natural gas (LNG) supplies and build
re-gasification facilities in Port Qasim, according to
Minister for Petroleum and Natural Resources Naveed Qamar.
Pakistan's Economic Coordination Committee (ECC) is expected
to approve 4Gas' re-gasification facility by the end of
January, as OPIC support made it financially viable. The ECC
will also approve long-term LNG supply contracts and a second
re-gasification project. Although the GOP preferred gas
supplies from Qatar, it would sign long-term contracts with
whatever group could provide supplies at the lowest price.
Qamar agreed with Holbrooke that the GOP and USG needed to
work together to change public perceptions of the U.S. and
GOP by informing the public of their joint efforts in the
energy and water sectors. End Summary.
Re-gasification facilities
--------------
2. (SBU) In a January 13 meeting with SRAP Holbrooke and
Ambassador, Minister for Petroleum and Natural Resources
Naveed Qamar said that imported liquefied natural gas (LNG)
was an important step in ameliorating Pakistan's natural gas
and electric power shortages. Qamar said the viability of
imported LNG depended on the landed cost of natural gas being
less than that for imported refined fuel oil (RFO),and
better still, less than the delivered price of natural gas
imported through the proposed Iran-Pakistan pipeline. (Note:
according to rough GOP estimates, the delivered price of
re-gasified LNG is less than RFO and 10 percent more than the
proposed Iran pipeline. End note.) Qamar said the Economic
Coordination Committee (ECC) would approve two
re-gasification facilities and LNG supply contracts by the
end of January. He said the projects would be completed by
the end of 2011, with the U.S.-owned company 4Gas supplying
500 m/cfd of gas and a second facility 200 m/cfd (Note: The
second company is Vitol-Fauji, though Qamar did not name the
project. End note)
3. (SBU) Qamar thanked Holbrooke for support of the Overseas
Private Investment Company (OPIC) for the 4Gas (Mashal)
re-gasification facility. He explained that the GOP had
hesitated to approve the 4Gas project due to "some financial
weakness" in its proposal, but USG support "clinched" its
decision to proceed. Qamar urged the U.S. to support
additional entrants into the re-gasification market, adding
that the Ministry of Petroleum and Natural Resources was
seeking U.S. support for a third project with a U.S. equity
stake. (Note: The Ministry sent a letter requesting OPIC
financing for Associated Group's GasPort project in December
2009. End note.)
4. (SBU) Qamar said that dredging the Port Qasim navigation
channel to allow for the transit of large LNG tankers would
facilitate the import of LNG. He encouraged the USG and U.S.
companies to look into how they could get involved in this
$200 million project.
LNG supplies
--------------
5. (SBU) Qamar said that Pakistan would prefer to get LNG
supplies from Qatar but would take "the cheapest offer on the
table." Qamar said that Shell, which controls sizable Qatari
LNG, had offered Pakistan LNG supplies at prices higher than
those recently offered to other countries. He noted that
fuel suppliers wanted to charge a premium due to concerns
over the GOP's ability to ensure payment.
Holbrooke asked whether Qamar was concerned about Chinese
competition for Qatar's gas supplies, and offered to lobby
Qatari PM Hamad bin Jassim al-Thani on Pakistan's behalf.
Qamar said this would not be necessary as the "global glut"
of LNG put Pakistan in a good negotiating position. He added
ISLAMABAD 00000182 002 OF 002
that Pakistan was not negotiating directly with Qatar but
with Shell for Qatari supplies.
Load shedding and public perceptions of the GOP
-------------- --
6. (SBU) Qamar noted that the 13.6 percent January 1 power
tariff hike came at an inopportune moment, as there was not
enough thermal generation in place to reduce both scheduled
and unscheduled load shedding. He added, however, that this
problem would be solved later in 2010. He said fuel supplies
would continue to get tighter, but the LNG program would help
improve them.
7. (SBU) Holbrooke said there had been an "understanding
deficit" between the GOP and USG that both sides needed to
repair. Holbrooke noted that the U.S. was moving quickly to
deliver on the Secretary's Signature Energy Program, and that
he would sign the implementing agreement for a $16.5 million
project to upgrade Tarbela dam's power house later in the
day. He requested that Qamar let the Pakistani public know
that the U.S. is working with the GOP to improve the water
and power sectors. Qamar said that the
GOP, along with the United States, suffered from negative
media coverage and agreed that the two countries should work
together to change public perceptions.
8. (U) This cable was cleared by SRAP staff.
PATTERSON
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: EFIN ECON ENRG PK
SUBJECT: PAKISTAN'S PETROLEUM MINISTER ON IMPORTED LNG
REF: 09 ISLAMABAD 2665
1. (SBU) Summary: The GOP has nearly completed a deal to
import liquefied natural gas (LNG) supplies and build
re-gasification facilities in Port Qasim, according to
Minister for Petroleum and Natural Resources Naveed Qamar.
Pakistan's Economic Coordination Committee (ECC) is expected
to approve 4Gas' re-gasification facility by the end of
January, as OPIC support made it financially viable. The ECC
will also approve long-term LNG supply contracts and a second
re-gasification project. Although the GOP preferred gas
supplies from Qatar, it would sign long-term contracts with
whatever group could provide supplies at the lowest price.
Qamar agreed with Holbrooke that the GOP and USG needed to
work together to change public perceptions of the U.S. and
GOP by informing the public of their joint efforts in the
energy and water sectors. End Summary.
Re-gasification facilities
--------------
2. (SBU) In a January 13 meeting with SRAP Holbrooke and
Ambassador, Minister for Petroleum and Natural Resources
Naveed Qamar said that imported liquefied natural gas (LNG)
was an important step in ameliorating Pakistan's natural gas
and electric power shortages. Qamar said the viability of
imported LNG depended on the landed cost of natural gas being
less than that for imported refined fuel oil (RFO),and
better still, less than the delivered price of natural gas
imported through the proposed Iran-Pakistan pipeline. (Note:
according to rough GOP estimates, the delivered price of
re-gasified LNG is less than RFO and 10 percent more than the
proposed Iran pipeline. End note.) Qamar said the Economic
Coordination Committee (ECC) would approve two
re-gasification facilities and LNG supply contracts by the
end of January. He said the projects would be completed by
the end of 2011, with the U.S.-owned company 4Gas supplying
500 m/cfd of gas and a second facility 200 m/cfd (Note: The
second company is Vitol-Fauji, though Qamar did not name the
project. End note)
3. (SBU) Qamar thanked Holbrooke for support of the Overseas
Private Investment Company (OPIC) for the 4Gas (Mashal)
re-gasification facility. He explained that the GOP had
hesitated to approve the 4Gas project due to "some financial
weakness" in its proposal, but USG support "clinched" its
decision to proceed. Qamar urged the U.S. to support
additional entrants into the re-gasification market, adding
that the Ministry of Petroleum and Natural Resources was
seeking U.S. support for a third project with a U.S. equity
stake. (Note: The Ministry sent a letter requesting OPIC
financing for Associated Group's GasPort project in December
2009. End note.)
4. (SBU) Qamar said that dredging the Port Qasim navigation
channel to allow for the transit of large LNG tankers would
facilitate the import of LNG. He encouraged the USG and U.S.
companies to look into how they could get involved in this
$200 million project.
LNG supplies
--------------
5. (SBU) Qamar said that Pakistan would prefer to get LNG
supplies from Qatar but would take "the cheapest offer on the
table." Qamar said that Shell, which controls sizable Qatari
LNG, had offered Pakistan LNG supplies at prices higher than
those recently offered to other countries. He noted that
fuel suppliers wanted to charge a premium due to concerns
over the GOP's ability to ensure payment.
Holbrooke asked whether Qamar was concerned about Chinese
competition for Qatar's gas supplies, and offered to lobby
Qatari PM Hamad bin Jassim al-Thani on Pakistan's behalf.
Qamar said this would not be necessary as the "global glut"
of LNG put Pakistan in a good negotiating position. He added
ISLAMABAD 00000182 002 OF 002
that Pakistan was not negotiating directly with Qatar but
with Shell for Qatari supplies.
Load shedding and public perceptions of the GOP
-------------- --
6. (SBU) Qamar noted that the 13.6 percent January 1 power
tariff hike came at an inopportune moment, as there was not
enough thermal generation in place to reduce both scheduled
and unscheduled load shedding. He added, however, that this
problem would be solved later in 2010. He said fuel supplies
would continue to get tighter, but the LNG program would help
improve them.
7. (SBU) Holbrooke said there had been an "understanding
deficit" between the GOP and USG that both sides needed to
repair. Holbrooke noted that the U.S. was moving quickly to
deliver on the Secretary's Signature Energy Program, and that
he would sign the implementing agreement for a $16.5 million
project to upgrade Tarbela dam's power house later in the
day. He requested that Qamar let the Pakistani public know
that the U.S. is working with the GOP to improve the water
and power sectors. Qamar said that the
GOP, along with the United States, suffered from negative
media coverage and agreed that the two countries should work
together to change public perceptions.
8. (U) This cable was cleared by SRAP staff.
PATTERSON