17 firms interested in supplying LNG

ISLAMABAD (Reuters) - Seventeen foreign and domestic companies have shown an interest in supplying Pakistan with 500 million cubic feet per day (cfd) of liquefied natural gas (LNG) for up to 10 years, SSGC spokesman said on Monday. A critical partner for the United States, Pakistan desperately needs energy to feed its stumbling power sector which suffers from hours of outages every day, seriously impacting the economy and stoking political unrest. In a bid to bridge the widening power shortfall, the Sui Southern Gas Company (SSGC) in May solicited expressions of interest (EoI) from companies for the supply of 500 mcfd of LNG. SSGC spokesman Zuhair Siddiqui said the response to the governments call had been encouraging, with 17 companies showing interest in the project. We are satisfied as we got EoI from very renowned companies like Shell, 4Gas Asia and Vitol, he said. He said the evaluation of the EoI and short listing of companies would take at least a couple of months. We need to see that those companies coming in are financially sound to have this contract as whoever gets it, it has to meet the minimum financial and other requirements, he said. Siddiqui did not give details about the governments requirements. He said the governments aim is to have the gas in the first and second quarter of next year. The quantity could be increased to 2 billion cubic feet per day. The winning company will identify its own customers and set up a terminal in Pakistan for re-gasification of LNG while the government determines the price of the gas through its Oil and Gas Regulation Authority, petroleum ministry officials said. The government will provide its system to pipe the re-gasified LNG to the companys designated customers and charge a transportation tariff for this service. Energy-starved Pakistan faces a shortfall that often peaks at 5,000 megawatts per day in summer. The country has been facing lengthy power outages for several years, which often trigger protests and add to the worries of the government, which is fighting rising militancy on its soil. Pakistan relies on oil for most of its power needs and imports about 80 percent of that. It spent about $3.99 billion importing 6.9 million tonnes of petroleum products and $2.45 billion on 4.3 million tonnes of crude oil in the first seven months of the July 2010 to June 2011 financial year.

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