Qatar Says Emphatic No

The news is out. As per Business Recorder exclusive, there is nothing concrete coming from Qatar. The vibes coming from Qatar are similar. Now it’s out in the public. The government was initially looking at getting deposits from Qatar. Got a plain no on it. The next in line are investments. Government is attempting to put everything under the sun for sale. But only doable investments in the next 3-6 months, where some initial work is being done, are selling of two RLNG power plants and Energas RLNG terminal where Qatar Energy is the single largest shareholder.

And for any investment, the desire would be to have private partners and some form of establishment’s implicit guarantee, as they don’t trust the government. Political instability and change in policies along with change in the government is making Qataris uncomfortable to solely work with the government.

In the last regime of PTI, the government went to Qatar for $2 billion deposits and later they got the money from UAE and only agreed to get a fraction from Qatar. The depositor got uncomfortable with the government changing its mind, and when, this the time government went for deposits, they simply refused, and said that we would only talk on investment options.

There are two projects where Qatar has been working on. Both are related to RLNG. One is the selling of two RLNG plants. Here Nebras Power has done some homework and that deal can be materialized if the Qataris get the price they want. Earlier, the Pakistan officials attempted to take this project out of what they were showcasing, as with reduction of guaranteed returns for 17 percent to 12 percent and the overall risks of power sector circular debt, the government is thinking that they won’t be able to fetch the right price. And Qataris are only interested in fair price which will cover all kind of risks associated with Pakistan.

Pakistan has two kind of risks – economic and political. Qataris want deals which are profitable for them. Wherever, there is involvement of government, political uncertainty comes into play. To cover that risk, they want some informal endorsement from the establishment, as they think, that only consistent power in Pakistan is the establishment.

On the economic risks, there are plenty of blind spots. They are tricks to the game in Pakistan where foreign players are at a disadvantage. The domestic private sector is experienced and knows how to deal with the mess. For them, everything in Pakistan is opaque. They need to have the comfort. They think that private sector can give them clarity on policies and implicit rules of businesses. Then the private player(s) with skin in the game will boost Qatari confidence.

For that, they have a project of Energas LNG terminal project where Qatar is the biggest investor, and the project is in the process of final approvals for over a year. In a first attempt, the champions of PDM went to Qatar and offered them to close the Energas project and in return asked for cheap RLNG. Qataris politely showed them the reality. Right now, with Russian war, everyone from East to West (minus US) is looking for gas from Qatar, and Pakistan presumptuously asked for a discount against an investment that Qatar has committed to Pakistan.

Seeing this and lower than anticipated price to be fetched from privatization of RNLG plants, the government showcased everything they could sell – from airports to hotels to terminals to solar projects. There was no homework from Pakistan side on it. Qataris cannot commit anything without due diligence. Hence, these are long shots. And who knows who is in power by then.

That is why when the meeting of two countries took place in the presence of key decision makers – COAS from Pakistan and Emir of Qatar, amongst all what being discussed; the only doable deals in the next 3-6 months are privatization of RLNG power projects and Energas LNG terminal.

The low hanging fruits are terminals and power projects. Both are of RLNG. For Qatar, Pakistan is a growing buyer of RLNG. The country has bought around 16-18 million tons of molecules in the last five years. The value in today’s prices is north of $10 billion. The market is only expected to grow in future. Anything related to RLNG is serious talk with Qatar. Rest is just for the consumption of Pakistani media.

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