Disagreement over letter of credit (L/C) terms is one of several factors jeopardising a huge deal for Pakistan to import liquefied natural gas (LNG) from Qatar.

Various business groups, including the Pakistan Businessmen and Intellectuals Forum (PBIF), are now expressing serious concerns over a looming deadline issued by Qatar to finalise the LNG deal.

Cancellation threat

Qatar has issued an ultimatum that the long-term deal will be cancelled if Pakistan cannot commit by 30 September to the L/C requirements and other terms proposed under the two countries' agreement.

State-owned Qatar Gas is insisting on a tripartite agreement between various state-owned agencies and that the independent power producers (IPPs) who eventually convert gas to power, will put up standby L/Cs to guarantee payment.

The IPPs have so far refused requests to provide such guarantees.

Ongoing dispute

Pakistan took 18 months to construct an LNG terminal to take gas from Qatar but disputes over the terms of the deal have been rumbling on now for seven months.

The cancellation of the long-term deal would be a great blow to Pakistan, PBIF President and former provincial minister Mian Zahid Hussain said in a recent press statement.

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