ISLAMABAD
Petroleum Minister Shahid Khaqan Abbasi announced on Monday to inject 200 million cubic feet per day (mmcfd) Liquefied Natural Gas (LNG) into system from March 31 (today).
"As per commitment, we are going to add 200 mmcfd LNG into system imported from Qatar which would be enhanced to 400 mmcfd from December 2015," he said while addressing a press conference here. He added that LNG has been imported by private sector by back to back LCs with Pakistan State Oil (PSO).
He also said that Pakistan and Qatar would hold talks to initial LNG supply deal on April 1 in Doha. He said that Pakistan would be striking best deal of LNG supply with Qatar compared to India and Japan. He said that Japan had inked LNG supply deal with Qatar linking price at 15 per cent of Brent.
"We are going to secure better deal than other countries despite being new buyer," he said. "We had talked to other countries like Indonesia, Nigeria for import of LNG but Qatar was best option for Pakistan," he said adding that five attempts were made by previous governments to import LNG but failed. He said that they wanted bundled LNG import projects which was main reason of failure. However, he said that present government followed unbundled LNG project and even Qatar had appreciated efforts of Pakistan to set up LNG terminal on fast track basis. He said India had capacity of dealing 14 million tons annual LNG import and Pakistani terminal would have 2.8 million tons per annum LNG import. He said that IP gas pipeline project was delayed due to sanction and gas through TAPI would not reach before 2019.
He also welcomed Indian offer for cheaper LNG import and said that India had demanded higher price earlier. "Indian government has exempted LNG from taxes to export," he said adding that India would have to lay pipeline with cost of $300 million," he said adding that India wanted fixed services which resulted higher price.
He said that second ship of LNG would reach Karachi in mid of April. He said that LNG was the only fast track option for Pakistan to overcome energy crisis. He said that LNG had been allocated to power sector as it would add 10 per cent additional power in the national grid.
"Current power production is 90 billion kilowatts per hour and use of LNG in power system would add 10 billion additional power," he said adding that power plants with 300 to 350 MW generation capacity were lying idle and imported LNG would help operate these power plants.
He said that gas based power plants were most efficient which could operate at 61 per cent capacity. The other cheaper source was imported coal but there were several issues in transportation. "By use of imported LNG, country would save $300 million per annum compared to HSD and LSFO," he said. He said that government would table plan of increasing gas prices before Common of Interest (CCI) to take provinces on board. He said that there would be declining trend due to cut in oil prices. However, gas prices increase had already been delayed to meet revenue requirements of gas utilities. He said that government did not want to increase gas price of domestic, power and fertilizer sectors. Captive power plants and industry were the only sector to increase gas prices be reducing cross subsidy.