LNG for fertiliser industry

As the major gas reserves in Pakistan are depleting rapidly, the supply-demand gap in the country is broadening and we need alternative sources of fuel to ensure the smooth functioning of our industries. It is heartening to note that the government of Pakistan has now signed a 15-year agreement with Qatar, to import nearly 3.75 million tons of Liquefied Natural Gas (LNG) per year. This long-term deal has been greatly appreciated by the energy-starved business community of Pakistan.

Since Pakistan is primarily an agricultural economy, its fertilizer sector plays an essential role in enhancing our agricultural output, to produce numerous high-volume export goods, like; Textiles, Wheat, Sugar, etc. For many years now, the robust fertilizer industry has been suffering due to insufficient supply of Natural Gas – which is used as an important raw material for producing fertilizer.

The first consignment under the Qatar LNG agreement had brought in approximately 141,000 Cubic meters of LNG at the LNG Terminal established in Karachi, from where it is being injected into the supply network of Sui Southern Gas Company Ltd. Following the first consignment, the second shipment of LNG has also arrived at the Port Qasim in Karachi, on 8th March 2016.

The import of LNG from Qatar is stated to be the cheapest source of Gas and offers an instant solution for the energy starved country. The LNG price agreed with Qatar is only 13.37% of International Crude Oil prices. It is more economical than the gas imported through TAPI Gas Pipeline and even cheaper than the indigenously produced gas. Pakistan’s total gas production is around 4 billion cubic feet per day (bcfd), while the national demand stands at 6 bcfd.

The cheaper LNG will save Rs 100 Billion per year for Pakistan and help the country meet 25% of its energy needs too, by adding nearly 2000 MW of cheap electricity to the national grid. On the global scale, many more countries are now turning towards LNG, as this low-cost fuel promises to power the emerging economies efficiently.

SYED MUBASHIR ALI

Lahore