ISLAMABAD – The Ministry of Petroleum has issued No Objection Certificate to the Sui Southern Gas Company Limited (SSGCL) to restart the bidding process for the import of Liquefied Natural Gas (LNG) and the establishment of an LNG terminal. An official source at the Ministry of Petroleum informed that the company would invite fresh bids for the supply of up to 3.5 million tonnes per annum of the LNG within the next two weeks.
He stressed that the government wants to complete the process within the next six to eight months to overcome the acute gas shortage. While the import of gas through pipelines could take at least three to five years, swift imports were possible only for LNG, he underlined. Pakistan is presently facing a shortfall in more than one billion cubic feet of gas per day (BCFD) as domestic consumption is estimated around 5.2 BCFD against output of four BCFD.
The meeting of Economic Coordination Committee of the Cabinet (ECC) chaired by Finance Minister Abdul Hafeez Shaikh on January 25 decided to scrap deal with GDF-Suez. In February 2010, the ECC, then headed by former Finance Minister Shaukat Tarin had awarded an LNG supply contract to the French company, GDF-Suez. Under the deal, Netherlands based 4Gas was to set up an LNG terminal, while GDF-Suez was to supply gas.
The Supreme Court of Pakistan in April 2010 directed the government to start the bidding process anew. Pakistan’s gas consumption is growing at a rate of seven percent per annum. The gas supply shortage is projected to increase to three BCFD in 2014, if no new discoveries are made, gas supply will stand at 4.2 BCFD against demand of 7.5 BCFD. Out of the discovered gas reserves of an estimated 54 trillion cubic feet (TCF), 26 TCF are already depleted and the remaining 28 TCF are being utilised an annual rate of 1.5 TCF.
