LNG keeps Pakistan’s economy moving, price lower than other fuels

ISLAMABAD, Aug 20 (APP): Around eight months back, Pakistan
signed a 15-year agreement with Qatar for import of 3.75 MTPA
(millions ton per annum) to meet its growing energy needs as all
the existing natural gas reserves appeared insufficient to bridge
the ever-increasing gap between demand and supply of the commodity.
The deal started doing wonders when the imported gas fed
industries, CNG stations, gas-fired power generation plants and
fertilizer sector, giving an impetus to economic activities in
the country.
“The country had no option other than to import gas whether
it is the LNG or through Iran-Pakistan and Turkmenistan-Afghanistan-
India gas pipeline projects as the country’s existing reserves are
depleting and there is no major find since long,” officials sources
in the Ministry of Energy, Petroleum Division, told APP.
They expressed confidence that the LNG import would prove
to be a game-changer for Pakistan because it was considered
an essential part of the energy mix needs of emerging economies.
The world is turning towards the LNG and emerging economies
such as China, Korea, Japan, India, Thailand, Indonesia, European
Union, and Brazil ensure that teh LNG remains part of their
energy mix requirements.
The Japan is importing 80 million ton of LNG every
year (MTPA) and India 15 MTPA due to the commodity’s low
price and efficiency as compared to other fuels.
The Pakistan’s gas supply-demand gap has reached four
billion cubic feet per day (BCFD) as total unconstrained gas
demand of the country is eight BCFD against total supply of
four BCFD. Needless to say in winter the demand rapidly
They said the LNG was the cheapest alternative fuel
and the only instant available remedy to meet the country’s
energy needs when the existing natural gas reserves
were diminishing.
“The LNG is available to consumers at lower rate than
the LPG. The RLNG price for consumers will be lower than
the prices of other alternative fuels. The price of the LNG
for consumers is Rs 850 per MMBTU as compared to home delivered
price of the LPG at Rs 2,000 per MMBTU and domestically produced
natural gas is priced up to Rs700 per MMBTU,” the official
Currently 600 mmcfd LNG is being imported and its volume
would be doubled soon. The LNG greatly helped in meeting the
country’s energy requirements as all gas-based power generation
plants are now functioning fully, over 1,200 CNG stations
restarted their operations, industrial and fertilizer sectors
getting uninterrupted supply, which is not less than any
Before the LNG import, Pakistan was importing up to two
million ton of urea fertilizer to meet the deficit due to
shortage of gas and now it is exporting over 500,000 ton of
fertilizer and entire power generation sector is getting full
gas supply, besides Nandipur Power Plant has also been converted
on the RLNG. Three new power plants with capacity of 3600MW are
running on LNG.
In 2015, the country got its first LNG terminal, which
was built in the record period of 11 months and is injecting
600 MMCFD of RLNG in the national system to meet the existing
energy shortfall.
Normally, a terminal takes around three to four years
to complete and become operational, but it is the hallmark
of the present government to set up the country’s first LNG
terminal in just 11 months.
The second terminal is scheduled to start functioning
shortly at the Port Qasim.
Now, the world’s major players are showing interest to
invest in the LNG sector of Pakistan by setting up their
own terminals and developing supply networks to supply gas
to consumers through third party access.
Pakistan is building deeper relations with many countries
through oil and gas deals on a government-to-government basis
after the successful model of oil imports from Kuwait, and
in this context, the LNG import deals with various countries,
including China, Turkey, Russia, Malaysia, Indonesia and Oman
are being negotiated.