Prime Minister Syed Yusuf Raza Gilani on Tuesday directed the Ministry of Petroleum and Port Qasim Authority (PQA) to expedite the process for the import of 500 million cubic feet of Liquefied Natural Gas (LNG) for generation of 2500MW electricity.
Addressing challenges
An official source said that while chairing a meeting on the LNG imports, the Prime Minister directed Chairman PQA to gear up his organisation to cope with the energy shortages issues for which all necessary measures should be taken to ensure early import of LNG. Earlier the Petroleum Ministry had sought intervention from the Prime Minister to direct PQA to expedite the construction of LNG import terminals, as any delay would further complicate the gas demand and supply situation in the country. Pakistan is faced with a gas shortage of 2 billion cubic feet per day (bcfd) and if immediate measures for import are not taken they would further complicate gas distribution among different sectors. The government wants imported LNG utilisation for power generation to overcome a shortage of 5000 MW due to the rising fuel oil prices in the international market.
Increasing capacity
The meeting was informed by the Oil and Gas Regulatory Authority (OGRA) that they have issued LNG terminal construction licenses to three companies, Pakistan Gas Port, Engro Corporation and Global Energy. The companies were facing difficulties in getting timely clearance from the PQA for starting construction activity. Petroleum Minister, Dr Asim Hussain informed the meeting that the Ministry was proactively engaged to pave way for the import of 500 mcfd LNG on emergency basis which would be exclusively used for the generation of 2500MW electricity in the country. The import of LNG and its utilisation infrastructure is targeted to be completed by the third quarter, before the start of winter season next year. In addition, a separate pipeline meant for the creation of increased capacity for transportation of gas from PQA to Punjab is also being considered as an option and work is progressing satisfactorily. The pipeline would be transmitting LNG imports from the port to Independent Power Producers (IPPs) in Punjab.
Worsening energy crisis
Four IPPs having a combine capacity of over 800 MW are facing a lot of difficulties as their gas supplies were cut on June 30 and for the time being 2 power stations are provided gas on fortnightly basis. If the IPPs run on furnace oil then the power tariff will have to be increased by Rs10 per kWh. Chairman PQA informed the meeting that three terminals need to be built with an estimated cost of $500 million to cope with the handling of the import of such a huge quantity of LNG. He said PQA was fully prepared to undertake the project after meeting the normal mandatory legal requirements and the imperatives of cost effectiveness of the project. He said PQA was already working with interested investors for the development of jetty and terminal facilities for handling LNG and implementation of agreement in this regard will be finalised shortly. The meeting was attended by the Minister for Finance Dr. Abdul Hafeez Shaikh, Minister for Petroleum Dr. Asim Hussain, Minister for Water and Power Naveed Qamar, Minister for Law Molla Bux Chandio, and secretaries of the respective ministries including senior officials of OGRA, Ministry of Petroleum, Law Division and the Minister of Finance.
