ISLAMABAD - Minister of Petroleum and Natural Resources Shahid Khaqan Abbasi on Thursday said that no LNG deal has been finalised with any country , however according to prevailing market situation Pakistan would not be able to get LNG less than $14 per mmbtu.
Abbasi while talking to media men in Parliament House said that LNG would be imported according to announced schedule and government was still in negotiations with Qatar. He said government was also negotiating with Malaysia for the LNG import. These all negotiations are government to government based, we are hopeful that in coming months we would ink some supply contract with some country and LNG would be available in the country as per announced schedule, Abbasi said. He said that in coming winters gas crisis would be at its peak.
We don’t have gas, in coming winters the forecasted gas demand of Punjab only would be equal to the total production of natural gas in the country”, minister said.
The total natural gas production in the country has been around 4 billion cubic feet per day. With depletion this year production target has been reduced to 3.8 bcfd.
In winters the demand of the population wise biggest province of the country increases many folds. The accumulative demand of domestic users, Industry and CNG even crosses the 4 bcfd figure. Abbasi while answering a question admitted that despite the severe shortage of the gas his ministry issued more than 30 million new domestic connections for this year only. Despite severe crunch government not only granted new gas connections against charging Rs 25,000 per connection but around two dozen new CNG station licences were also issued by OGRA. Earlier, while attending the standing committee on petroleum and natural resources Abbasi explained the Senate committee that LNG pricing was a complicated issue.
It is not only the per mmbtu cost but the terms of the agreement are the most important, for example if we ink a long term agreement we could get a good price but what if the international prices come down in coming years, as projected, we would be at loss, so we would go for a short term duration agreement, Abbasi told the committee. LNG is a fuel replacement to petrol, in coming years LNG price would be down as petrol price is forecasted to be low, he explained. Minister admitted that neighbouring country was getting LNG at around $6-8 per mmbtu. He hoped that with the import of LNG 18 percent electricity generation would increase. We would divert the LNG to four power plants near Lahore and they would generate up to 18 percent additional power from the imported fuel”, he said. It is pertinent to mention that presently domestic consumers are paying Rs.106 per mmbtu for first M3, while Power Stations (Wapda’s and KESC’s Power Stations) have been charged Rs.488.23 per mmbtu.
If dollar prices are taken at Rs 102 against one dollar, $14 adds up to Rs.1428. Meaning that power plants paying Rs.488.23 per mmbtu would have to pay more than Rs. 1428 to get the same amount of LNG . Minister while answering the standing committee also expressed his concerns over the actions of Federal Investigation Agency (FIA ) and said that it carries out operations on its own and without the consultation of the ministry. We have not requested FIA to take action against anybody not even to stop the gas theft, FIA is taking action at its own, which sometimes are unnecessary unplanned and lack proper intelligence, which result in spreading a fear among staff, Abbasi said. Minister feared that this year fertilizer may come short due to less production and government would have to import up to 400,000 tons fertilizer to meet the local demand.