How Qatar’s LNG deal landed former PM and Finance Chief in jail

In this file photo, former Pakistani Prime Minister Shahid Khaqan Abbasi was speaks during an interview with international journalists in Islamabad, Pakistan, Jan. 22, 2018. (REUTERS)
Updated 13 August 2019

How Qatar’s LNG deal landed former PM and Finance Chief in jail

  • Details of $16 billion accord with Qatar in 2016 have not yet been made public
  • Following the deal, a contract for the country’s first LNG terminal was awarded to awarded to the favoured local company - NAB

KARACHI: A long-term Liquefied Natural Gas (LNG) contract that Pakistan signed with Qatar three years ago has landed two of the country’s top former officials, a former Prime Minister and Finance minister, into jail on suspicion of corruption- a charge that opposition leaders have termed the political victimization of political opponents.
The $16 billion sale and purchase agreement termed as a ‘game changer’ for Pakistan was signed between then Petroleum Minister Shahid Khaqan Abbasi and Chairman Qatargas, Saad Sherida, in February 2016, following frequent power outages and amid depleting gas resources. The deal was projected to meet the 20 percent increase in the demand of energy in the coming years, for the supply of up to 3.75 million tons of LNG every year for fifteen years. That 2016 deal also supplied Pakistan’s first LNG terminal.
Last month, Pakistan’s anti-graft agency, the National Accountability Bureau (NAB) took Abbasi into custody on the grounds that he was stalling the investigation process by not responding to questions. Earlier this week, former finance minister Miftah Ismail was arrested in the case as well.
“This is nothing but victimization and harassment of political opponents,” PML-N Senator Saleem Zia, member of the senate’s Standing Committee on Petroleum, told Arab News. 
“This despite the fact that Khaqan Abbasi has been openly cooperating with NAB,” he said, and added that as the case proceeds, “everything will be exposed.”
What that ‘everything’ is, still remains shrouded in mystery, as details of Pakistan’s accord with Qatar have not yet been made public. The arrests are adding to the uncertainty, with close to no information on the terms and conditions of the deal yet known. 
As the opposition comes under increasing scrutiny by NAB, with former Prime Minister and PML-N party head Nawaz Sharif in jail for ten years, and his daughter, Maryam Nawaz arrested on Thursday, opposition leaders have accused the government of using the arrests to distract from its own incompetence.
“There is strong reaction from all parties and general public who believe that the government is making (arrests) to hide its incompetence. They should focus on other affairs because this is not going to solve the problems of the country including its economy,” Zia said.
In 2016, Pakistan’s then opposition parties had voiced their concern over the LNG deal made behind closed doors, and largely out of the public eye, while the PML-N government had defended the deal as Pakistan’s “best available option,” claiming it would save the country $1 billion every year.
“This agreement is being acknowledged globally as most cost effective deal for LNG. Pakistan will continue to import LNG from Qatar till 2032,” Abbasi had announced soon after signing the deal.
Following the deal, a contract for the country’s first LNG terminal was awarded to a local company which sparked criticism by opposition lawmakers who protested the lack of transparency. 
According to NAB prosecutor, Sardar Muzaffar Abbasi, the contract awarded to the favored local company has cost the country more than a billion rupees in losses. 
“Due to this flawed contract, the national exchequer has suffered Rs. 1.54 billion losses so far,” he argued in Islamabad High Court on Wednesday ahead of Miftah Ismail’s arrest.
According to Haider Waheed, who is Ismail’s lawyer, the NAB prosecutor did not give any details of losses incurred beyond quoting the figure. 
“They do not know about it, and there are no losses at all,” Waheed said.
When contacted for comment, NAB prosecutor, Sardar Muzaffar decline to comment on the break-up of the loss figure.
Experts keeping a close eye on developments say that the Qatar deal was thrown into doubts after analizing the terminals’ Return on Investment (RoI) and Return on equity (RoE). The re-gasification Terminal I and Terminal II have been set up in Karachi.
“The RoI and RoE on the investment in the LNG plant (Terminal I) is too high on both operational and non-operational level. That is a doubtful element and that is the pivotal point of the game,” Muzamil Aslam, senior economist, told Arab News. He added that no document was publicly available but the payment of a large amount as the penalty on non-utilization of terminals, suggested that returns were negotiated too high.
“There were positives and negatives of the LNG deal. Negative (points) being that the spot rates move down sometimes but (they) have made a long-term contract... to ensure supply. Negative is... why did you sign a fifteen year deal when you could have bought some quantity from the spot market and some through contract?” he said.
Additional Prosecutor General NAB, Nayyar Abbas Rizvi, said that irregularities that now led to the arrests were committed here on the Pakistan side, during the awarding of the contract to a local company, and also in the LNG deal with Qatar. 
“There are many other things,” he said, but declined to give any further details about the high-profile case that yet remains shrouded in mystery.


Pakistan army denies reports of joint border patrols with Iran

Updated 09 December 2019

Pakistan army denies reports of joint border patrols with Iran

  • Patrolling operations on respective sides are conducted by respective forces, military spokesman says
  • Last month, army chief visited Tehran for security talks

ISLAMABAD: Pakistan army spokesperson on Monday rejected media reports suggesting that Pakistani and Iranian security forces conducted joint border patrolling.
“News published by Dawn today ('Pak-Iran Forces jointly conduct border patrolling') is factually incorrect,” Director-General Inter-Services Public Relations (ISPR), Maj. Gen. Asif Ghafoor, said in a tweet.
He added that “there is no joint patrolling anywhere on Pakistani borders” as “patrolling operations if required are always on respective sides by respective forces through coordination.”

The English-language daily reported earlier on the day that Pakistan and Iran had conducted another joint patrol on the border near Taftan town in Chagai district, Balochistan.
Soon after Ghafoor's comment, Dawn's editor Zaffar Abbas clarified that “the confusion was caused by the official news agency APP, as the picture caption said ‘joint patrolling.’ Radio Pak also tweeted the same. But we will be carrying out correction in light of your statement.”

Border security has long been a major cause of distrust in Pakistan-Iran relations. 
In April, Iranian President Hassan Rouhani announced that the two countries would form a joint quick-reaction force to combat militant activity on their shared border, following a deadly attack on Pakistani security personnel on the coastal highway in southwestern Balochistan, where 14 soldiers lost their lives.
On Nov. 18, Pakistan army chief General Qamar Javed Bajwa visited Tehran for security talks with Iran's political leadership and military leadership.
In May this year, Pakistan began the fencing of certain areas along the 950-kilometer border it shares with Iran.