Picture Credits: Associated Press of Pakistan
ISLAMABAD, Aug 27 (APP): Two multinational companies are all set to start physical work on setting up their Liquefied Natural Gas (LNG) terminals during the next few months after the government opened up the energy sector under its ease-of-doing-business strategy.
“The government had allowed five private sector companies to establish their own LNG terminals, out of which two firms, Exxon Consortium and Mitsubishi will start physical work on their projects before the end of the current year”, a senior official privy to petroleum sector developments told APP.
All agreements, permissions and arrangements in that regard have almost been finalized, he added.
After setting up the terminals, he said, the companies would import and sell the commodity on their own without any involvement of the government except regulation matters. Replying to a question, the official said a formula already existed under which the private sector could import LNG as per its requirements, get it injected into the existing gas transmission network and receive at industrial units.
The official said private sector companies including Exxon, Shell and Mitsubishi besides Spanish and French firms were poised to establish LNG terminals in Pakistan, having a capacity to re-gasify 500-700 Million Cubic Feet per day (MMCFD) gas each, in Pakistan. These companies are considered the world’s leading players in the energy sector.
He said the federal cabinet had cleared the private sector companies, adding “A terminal, as per international standard, takes almost two years to complete once its construction starts.”
Currently, the official said, two LNG terminals were operating at Port Qasim Karachi and injecting around 1,200 MMCFD gas in distribution network of Sui Northern Gas Pipelines Limited and Sui Southern Gas Company.
Replying to a query, he said the previous government itself made LNG import contracts at exorbitant that involved billions of dollars financial commitments. But, the Pakistan Tehreek-e-Insaf (PTI) government was importing additional LNG at around 20 to 25 percent reduced rate for the last one-and-half years as compared to the old deals made by the previous regime.
He said the country’s existing natural gas reservoirs were depleting fast at a rate of 9.5 percent annually, and the LNG was the only available instant remedy to bridge the increased gap between demand and supply of the country. Currently, the country’s indigenous gas production is around 3.7 Billion Cubic Feet per Day against the demand of 6 BCFD.
According to a recent report of Oil and Gas Regulatory Authority, the gap between demand and supply of gas could increase by 5,389 Million Cubic Feet per Day (MMCFD) by 2029-30.
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