ISLAMABAD - Despite the progress in the import of liquefied natural gas (LNG), the oil mafia is still creating hurdles in its import by offering bribes and is ready to pay a huge amount for not installing the LNG plants, revealed the federal minister of Petroleum and Natural Resources Shahid Khaqan Abbasi here on Thursday.
“The oil mafia has offered bribes and pressurized me and other officials involved in LNG import which has further strengthened my commitment for the import,” said the federal minister at his third press conference held her within span of less than a week. From the day one the mafia is trying to stall the LNG import process as it will deprive them of billion of rupees profit, the minister added.
The minister also announced that the Oil and Gas Regulatory Authority is ready to announce the price determination for the imported LNG within one month as they have already collected the data from PSO.“Earlier OGRA was dysfunctional therefore the determination of the prices for the LNG was delayed but now the quorum is completed and its working on the price determination,” he added.
For the last one and a half years, we are negotiation a sale-purchase agreement [SPA] with the Qatar government and now it’s ready to sign, the minister said. “Today I am inviting, all those politicians and experts, who claim that they can get cheaper price for the LNG, to come and show us where to get the cheaper rates,” the minister claimed. The international prices of LNG are ranging from 11.2-17.2 percent of Brent crude oil and Pakistan can get a deal less than 14 per cent of Brent.
The government is planning to establish more LNG terminals in future as we have huge demand of gas and within next three years Pakistan LNG import may reach 15 million tons per year, the minister informed.
Pakistan, an energy-hungry country is gradually increasing its reliance on imported LNG and is enjoying lowest rate on gas import Qatar and its price differential will save around 100 billion rupees of the economy.
“As our gas fields are depleting, and in future even in housing you will need imported gas. Only domestic based gas can compete with LNG. On annual basis, LNG is compatible with the prices of Iran-Pakistan (IP) and Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline projects, the minister claimed, adding that in some cases it may be cheaper than these imported gas. In the face of depleting natural gas the only cheaper alternative is LNG and replacing diesel based power plants with LNG will save Rs 100 billion a year for national kitty, the minister maintained. “I assure you if today we converted all of our thermal power generation from diesel and furnace to LNG the country will save Rs 200 billion” he maintained.
“Two years ago the industry was at stand still as not enough gas was available for the fertilizers sector, power plants and CNG sector. Due to the import of LNG one fertilizer plant has been switched over to R-LNG while two more are ready to use the imported gas in their plants,” Abbasi maintained. Since March 26, 2015 when the LNG import started into the country, 10 ships have been imported so far and till March 26, 2016, we have to bring 15 more ships under the contract. However, if we increase the number of ships the tolling charges will reduce, so we target to import around total 30 ships this year.
The federal minister said that around 600 megawatts RLNG–based electricity has been added to the national grid. R-LNG-based power projects of 3600 megawatts are in advance stages and will be able to start adding energy into the system by summer 2017. It is lowest cost energy and its efficiency will be 62.5 percent while the efficiency of the power plants operating on furnace oil is around 30 percent.
Regarding the contract for the LNG terminal, the minister said that the government gave the contract to the Engro Corporation after a bidding process to build a LNG terminal at Port Qasim. The company completed the project within 11 months after spending $150 million as capital cost. It also took a floating storage re-gasification unit (FSRU) on lease which having the capacity to deliver 600 Million Cubic Feet per Day (MMCFD) of the commodity which will be injected into the system of Sui-Southern Gas Company (SSGC).
So far the government investment in LNG business is zero and is inviting IPPs, fertilizer companies to come forward and procure LNG for themselves, he said.