ISLAMABAD: Delay in the resolution of legal issues arising from public sector imports have forced the government to fast track imports of Liquefied Natural Gas (LNG) through the private sector, to meet the rising power demand by the industrial sector in the country.
According to official sources, the government has decided that the private sector will be granted permission to import LNG up to the upper limit of one billion cubic feet per day (BCFD).
However the government is unwilling to provide any guarantee on the utilisation of imported LNG and the importers will be left to fend for themselves when it comes to finding customers for their products.
The government, sources said, decided to involve the private sector as the Petroleum Ministry and the Ministry of Law have failed to settle the procedure for the tendering of LNG imports.
Import of LNG was to have commenced from October this year, but legal issues have hampered the start of public sector LNG imports. It is important to mention that LNG supplier GDF Suez has already given a deadline till the end of November to the Petroleum Ministry to address its internal disputes.
Otherwise, it has threatened to sell Pakistan’s allotted quota to another buyer. Gas consumption in the country is growing at a rate of seven percent per annum.
At present, 68 percent of electricity is generated from thermal production consisting of both oil and gas resources. The deficit between the domestic demand and supply has escalated to 2 BCFD compared to one BFCD, last year. Out of the total discovered gas reserves of estimated 54 trillion cubic feet (TCF), 26 TCF are already depleted and remaining 28 TCF are being utilized an annual rate of 1.5 TCF.
Existing gas reserves are depleting at a fast pace and very few large deposits have been discovered during the previous decade and has compelled the country to seek new sources through imports.
The Iran gas pipeline project is expected to take at least three to five years to be completed. However, the geopolitical scenario casts a long shadow over the project.
Timely imports are only possible only through the extensive usage of LNG, with a major producer, Qatar, and one of the major suppliers, GDF Suez have guaranteed supplies to Pakistan. Due to legal wrangling, the import in public sector is being delayed and compels the government to import the vital fuel through the private sector, sources said.
Out of the five corporations interested in LNG imports, two were actively considering investing in the construction of a LNG terminal, which is necessary to recompress the gas before it can be introduced in the gas transmission network.
The private sector has assured the government of its ability to meet all financial expenditures entailed by the project.
The private sector in Punjab has also exhibited active interest and sought approval from the federal government to import LNG. Sources indicated that Petroleum Minister Syed Naveed Qamar had constituted a working group, comprising members from the Petroleum Ministry and gas utility companies, Sui Southern and Sui Northern.
A meeting between the officials of Petroleum Ministry, Ministry of Ports and Shipping and the government of Punjab is to be conducted next week.
import of natural gas in the form of LNG is the only option availbe to meet gas shortage to the tune of 2bcfd and further increasing @ 10% per annum, but regretfully, criminal negligence and lethargic attitude on the part of GOV is ruining every sector of the economy. LNG should have come in to the main gas stream two years before, but still govt is sitting on files. Pak iran gas pipeline and pak Turkmenistan gas pipeline projects are very uncertain prepositions due to variety of reasons. indigenous gas exploration must also be taken on war footings, to avert major energy crises in the country.
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