LAHORE: Pakistan may take advantage of low spot prices and boost Liquefied Natural Gad (LNG) imports to meet the country's growing energy demand, said noted businessman and Associated Group chairman Iqbal Z Ahmed while talking to Business Recorder.
Iqbal urged the government to ensure utilisation of LNG in the power sector. He said SNGPL and SSGC can secure additional customers by providing LNG to the export industry as well as the CNG sector.
He also said despite expressing resolve to take advantage of record low crude oil and liquefied natural gas (LNG) prices, Pakistan is not maintaining energy supply chain mainly due to lack of a coherent and systematic approach.
He questioned that why is Pakistan not positioned and seemingly lagging in taking advantage of the global gas glut.
He was of the view that unlike regional countries, the capacity of LNG import infrastructure is not being fully utilised. Oil imports are also not up to the mark, keeping in view availability of attractive import window. Essentially, there is lack of systematic approach in meeting energy needs of all sectors, especially power, fertilizer and CNG sectors.
The current price of imported LNG is lower than the locally produced Natural Gas.
“If we had any sense, we would maximise our imports of LNG and preserve our local gas for another time when the world market prices for gas go up and we can then use the local gas to our advantage" Ahmed said.
He demanded that government must allow private sector imports of LNG also which will provide competition to Qatari gas and in any case, private sector imports at cheaper price will reduce the collective basket price of LNG to the advantage of the public.
Iqbal Z Ahmed said we have seen in the past that arbitrary and inconsiderate decisions by our decision-makers have caused not only huge losses to the public exchequer but have also tarnished our image internationally.
He was of the view that LNG is also not a new matter of controversy in the country. First it was former prime minister Shahid Khaqan Abbasi, who became a target of NAB for allegedly misusing his authority and appointing certain individuals without due diligence. Though Abbasi has been released on bail, NAB has already done tremendous harm to his name and reputation.
He showed his apprehension that now it appears to be the turn of Pakistan Gas Port Consortium Limited (PGPCL) which is a wholly owned subsidiary of Pakistan Gas Port Limited (PGPL) and operates the LNG import terminal at Port Qasim. This project represents an investment of about half a billion dollars from PGPCL.
He further said the project was awarded through an international competitive bidding process to provide LNG storage and regasification services to state-owned PLTL for 15 years. The tariffs offered were among the most competitive anywhere in the world and the terminal's surplus regasification capacity was to be made available to the private sector.
While giving details of the Pakistan Gas Port project, chairman Iqbal Z Ahmed said PGPCL terminal comprises a state-of-the-art Floating Storage Regasification Unit, which was built in 2016 by Samsung Heavy Industries in Busan, and is permanently moored at Port Qasim under a 15-year agreement between PGPCL and BW Group, a Norway-based shipping company. The FSRU at the PGPCL Terminal has a storage capacity in excess of 170,000m3 and a peak regasification capacity of 750mmscfd.
Since Jan 2018 when its commercial operations started, 95 LNG cargoes have been processed at the terminal and it has injected over 278 BCF of regasified LNG in the Sui network.
Iqbal Z Ahmed suggested that the government should ensure continued support to LNG sector and deregulate the sector for a level playing field. “There are many loopholes and the private sector's role in LNG has yet to be defined. Free this industry and let the private sector jump in and the country will observe a stiff competition and a drop in LNG prices," Ahmed said.