The energy-starved Pakistan has signed a Memorandum of Understanding (MoU) with the government of Qatar for import of 500 million cubic feet of Liquefied Natural Gas (LNG) per day.
This was stated by Prime Minister Yusuf Raza Gilani while inaugurating the Rs2.55 billion LPG Terminal here on Saturday at Port Qasim. “I am happy to inform you that during my recent visit to the brotherly country of Qatar, Pakistan concluded a Memorandum of Understanding with the government of Qatar for import of 500 million cubic feet of LNG per day,” the prime minister told at the inaugural ceremony, which was attended by the federal and provincial ministers along with other dignitaries.
To be imported through SSGC-LPG Terminal, the imported LNG, PM said, would be provided to power houses to generate 2,500 megawatt of power in the country. Slamming the previous successive government for their failure to give due focus to the energy sector, the prime minister said the key mega projects undertaken by his government to meet the energy demands include Diamir Basha dam, Thar Coal power project, TAPI project, and CASA-1000 in addition to dozens of small and medium-sized dams across the country. Pakistan, he said, was also committed to Iran-Pakistan gas pipeline project, which would help the country overcome its energy problem to a large extent.
“The implementation of these mega projects will not only enhance overall energy supplies and provide energy diversity, but will also lead to a greater energy security,” he said. Despite economic constraints imposed by natural disasters, energy deficits, global recession and war on terrorism, the fundamentals of Pakistan’s economy were showing positive signs, he said. Gilani said, given the size and diversity of Pakistan’s economy, the country’s total energy requirements were expected to grow substantially during the next decade.
“It is in this context that achieving self-sufficiency is a key factor to keep the engine of economy running as well as meeting the future demands of the economic growth.” According to the premier, Pakistan was meeting 53 per cent of its total energy requirements through indigenous oil and gas production, whereas, other indigenous resources further meet 19 per cent of the country’s energy needs.
The remaining 27 per cent of the energy needs were currently being met through imports, he said.
“The energy imports are likely to increase as domestic gas production and supply presently fail to meet the demand of the domestic users, the industrial sector and power generation,” he said adding due to their all-pervasive use by these sectors, the country’s gas reserves may be insufficient to meet the rising demand and will deplete fast. “Such a situation will force the country to resort to importing large volumes of gas at international prices to feed the domestic market if local production is not enhanced in relation to demand,” PM said.
He said it was well known that escalating energy import bill would put the economy under stress and hamper the country’s economic revival, the government was alive to the dramatic changes that had taken place in the price and cost environment of the international oil and gas industry. The fluctuating nature of crude oil prices in the international market had posed serious challenges to the global economies. “Hence, reliance on imports cannot be a feasible long-term solution,” said the prime minister. The situation, he said, was calling for adopting a creative approach to respond to emergent energy challenges as well as work out a comprehensive strategy on sustainable basis. “I am pleased to inform you that the federal cabinet in the last meeting approved the National Petroleum Exploration and Production Policy 2012,” he informed.
Prime minister said the policy recognised the operating challenges and key considerations facing Pakistan’s oil exploration and development industry.
“It signifies the government’s commitment to provide fiscal and regulatory incentives to E&P companies, which will provide an impetus to them to speed up their exploration and development programmes with a view to maximise domestic oil and gas production in the coming years,” he added. The core policy objectives of this policy, the prime minister said, were to accelerate exploration and production activities in country with the purpose to achieve optimum self-sufficiency in energy by increasing oil and gas production, to promote direct foreign investment in the country’s energy sector by increasing competitiveness of its terms of investment, to encourage the Pakistani oil and gas companies, to get fully involved in the investment opportunities and to promote increased E&P activity in the onshore frontier areas by providing globally competitive incentives.
“The salient features of this policy are indigenous production and decreased reliance on imported energy in a phased manner. It is in this background that recourse to LNG and LPG is critical to bridge the gap between demand and supply and ease pressure on the local production,” he said. Gilani said establishment of the country’s first SSGC-LPG Terminal at Bin Qasim would greatly facilitate the handling of energy imports in the shortest possible time-frame.
“The gap between demand and supply has hampered the socio-economic development of the country,” he said.
On the occasion, Advisor to Prime Minister on Petroleum and Natural Resources Dr Asim Hussain said the country was facing an acute gas shortage that would be met through LPG import.
Managing Director SSGC Azeem Iqbal Siddiqui said his company started this business in view of the increasing demand for gas in the country.
He said his company had acquired SSGC-LPG Terminal at a cost of Rs2.25 billion and LPG ships would be accommodated at the terminal with the storage facility being at PQA. Others who attended the event included Governor Sindh Dr Ishrat-ul-Ebad Khan, Chief Minister Sindh Qaim Ali Shah and provincial ministers and members of Sindh Assembly. ISMAIL DILAWAR
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