The introduction of Liquefied Natural Gas (LNG) will bring considerable development in every energy-related field.
In a landmark step by the government in the energy sector, the first ever shipment of LNG will be injected into the system by March 31. Senior official of ministry of petroleum and natural resources told that initially it would be used for producing electricity but later it would also help out in overcoming CNG shortage for transportation.
But on the other hand, the government has failed to establish a mechanism for collecting transmission charges on imported liquefied natural gas (LNG).
The government also wants to hold in abeyance the third-party access rules framed by the previous administration of Pakistan People’s Party in the wake of reservations expressed by the utilities. These companies express fear that they will suffer heavy losses if the Third Party Access Rules 2012 for collecting LNG transportation charges are implemented.
Petroleum and Natural Resources Minister Shahid Khaqan Abbasi confirmed that the government had yet to address the issue. “We are going to finalise Asia’s best LNG deal with Qatar and the price will be agreed in an upcoming meeting,” he said.
Officials aware of the developments said the petroleum ministry had sent a summary to the Economic Coordination Committee (ECC), asking the body to allow the Oil and Gas Regulatory Authority (Ogra) to grant permission for third-party capacity allocation and set the transportation tariff under negotiated arrangements between the stakeholders.
It also suggested to the ECC that third-party access rules could be held in abeyance until the requested amendments were made.
Officials pointed out that the gas utilities had highlighted various bottlenecks in the third-party access rules, which were likely to hamper a smooth transportation of imported LNG through the existing pipeline network.
The capacity allocation in the existing network for the third party was to be decided under these rules. The role of utilities is limited to the transmission of LNG to the consumers and they are entitled to transportation charges under a pre-determined formula.
Furthermore, the gas utilities are bound to account for gas in terms of equivalent energy irrespective of the volume injected at the point of entry.
The excess volume supplied to meet the requirement of British thermal units will likely be considered unaccounted for gas (UFG), causing severe losses to the transporter – the two gas utilities. Under the circumstances, various sections in the rules require an extensive review.
Ignoring all such issues, the officials of ministry of petroleum and natural resources are continuously making claims that with the import of LNG, there would be decrease in load shedding as initially it would be used to overcome electricity shortage.
They say initially 200 mmcfd (million cubic feet per day) LNG will be imported as per the agreement with Qatar while expanding its ambit and subsequently the import will be increased to 400 mmcfd.
A Liquefied Natural Gas (LNG) ship which stores and converts LNG to gas (FSRU) reached Port Qasim on Thursday with an initial cargo load of 148517 cubic metre of LNG.
This will now permanently dock at the Engro Elengy Terminal at Port Qasim and together will provide Pakistan’s first state-of-the-art LNG terminal. The terminal has been built at a cost of USD 135 million in a world record time of 335 days of signing with actual construction of 179 days and the FSRU vessel is worth an additional USD 300 million.
Engro won the contract to handle LNG at the most competitive rate in the region. In addition, the vessel has the capacity for regasification of up to 600 mmcfd which will have a major impact on solving the energy crisis in the country.
CEO Engro Elengy Terminal Limited Sheikh Imran ul Haq said: “The company has fulfilled its commitment by constructing all infrastructure facilities in a record time period. This historic achievement is testament to Engro’s expertise in deploying world-class solutions against stretched deadlines.”
“We are hopeful that the commissioning of the country’s first LNG terminal will help meet the rising demand of gas in the country and fuel economic growth and help alleviate energy crisis that continues to impede industrial growth.”
It may be noted that the FSRUs, are purpose-built LNG tankers that incorporate onboard equipment for the vaporization of LNG and delivery of high-pressure natural gas.
It is estimated that the converted fuel will help the government make an estimated savings of about USD 1.0 billion per annum on its current fuel import bill of nearly USD 15 billion.
