Five more LNG agreements to be signed with Qatar soon

| Minister rules out Nepra-Ogra merger | TAPI pipeline to be completed by 2019

2016-03-13T02:27:18+05:00 Muhammad Irtaza

MULTAN - Federal minister for petroleum and natural resources Shahid Khaqan Abbasi declared on Saturday that the country would sign five more liquified natural gas (LNG) supply agreements with Qatar soon.
Addressing the members of Multan Chamber of Commerce & Industry (MCCI), the minister added that the new LNG supply agreements would help fulfil national energy needs and put the country on path of progress.
On the occasion, Shahid Khaqan Abbasi also declared that the country was heading towards ‘charter of economy’, which would ensure continuity of economic policies. He disclosed that gas would be supplied to all fertilizer factories during the current year, adding that this decision was taken to meet the domestic demand. He added that it would also help the country save precious foreign exchange and cut fertilizer import.
He announced that now domestic LPG gas cylinder would be available at Rs700/800 in winter. He said that we have established a new company “Pakistan Energy” which would sign PSA with IPPs and industries.
Commenting on the proposal of merger of NEPRA and OGRA, the minister said it was not possible because there were problems in doing so.
Khaqan Abbasi said past three governments made five attempts over the ten years to import LNG, but they failed in adopting integrated approach where LNG terminal developer was also LNG supplier. He said the PML-N government resorted to un-bundled approach and the LNG terminal development was separated from LNG procurement, thus succeeding to provide the country with its first LNG-based gas within 20 months of its tenure. The minister said LNG was a game changer and the 400 mmcfd LNG terminal would add five per cent to the country’s primary energy mix. He said average re-gasification tolling fee was charged at $0.66 per MMBTU which was the lowest in the world, adding most LNG contracts in the world were priced at direct linkage to oil and Pakistan LNG imports would also be linked to oil.
He said since the country’s natural gas production was stagnant at 4,000 mmcfd per day for 10 years and constrained demand stood at 6,000 mmcfd with hydrocarbon resources fast depleting, thus the government ventured into LNG import. He said Pakistan needed to import natural gas through pipelines or LNG.
The minister said Iran-Pakistan pipeline of 750 mmcfd project was delayed due to international sanctions and the first gas could not be available before end of 2017. “In addition, Turkeminstation-Afghanistan-Pakistan-India (TAPI) pipeline with 1325 mmcfd also got delayed due to Afghanistan’s instability and structural issues with the project transaction and first gas could not be available before 2019,” he said. In such situation, Abbasi said, the government ventured into the LNG import through long-term contracts, medium-term contracts and other purchases. He said cost calculations proved that RLNG was cheaper than all imported fuels as the OGRA had determined RLNG price of 8.64 per MMBTU. He said so far 14 LNG cargoes had been re-gasified at the LNG terminal, adding the one-year contractual commitment was 24 cargoes, but the number could go up in one year to 26 cargoes. He said average price of LNG cargoes procured was less than 14 percent of Brent. He said power generation based on RLNG would generate additional annual generation of nine billion KWH. Similarly, under-construction RLNG based power plants of 3,600 MW RLNG would generate 30 billion KWH, he added.
The minister informed, “We are providing 3,00,000 gas connections annually as permitted by OGRA. However, we would end the backlog of urgent gas connection cases by the end of June 2016. We are trying to resolve the problems of tail-end domestic as well as commercial consumers.”
The minister said that we are taking measures to check the adulteration of kerosene oil in diesel. The minister said that Rs150 billion were being spent on gas pipeline from the GIDC. The minister said during current tenure of the PML-N government, record 227 wells have been drilled, which resulted in 71 new oil and gas discoveries. With new discoveries, he said, over one trillion cubic feet (TCF) of gas and 16 million of barrels of new oil reserves had been added to the system.
The country, he said, was moving on a fast track towards achieving autarky in the energy sector as all-out efforts were being made to achieve the target by utilising conventional as well as non-conventional reserves like tight gas, shale gas and marginal fields and British thermal unit (BTU) gas. Under these steps, the minister said, around 560 million cubic feet per day (mmcfd) of additional gas and 27,000 barrels per day (bpd) of oil have been injected in the system so far due to the government’s effective policies.
APP adds: About LPG, Shahid Khaqan Abbasi said the government would regulate the LPG sector and it would recommend LPG price which would surely help availability of the cheapest gas to consumers throughout the year.

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