Oil importers perturbed at LNG import

ISLAMABAD: Big oil importers fearing massive decrease in their hefty profits wish delay in the LNG import to Pakistan.
Pakistan imports around $15 billion worth of oil annually and a big chunk of it is imported by the state-owned Pakistan State Oil (PSO).
As the LNG import was to directly affect the import of oil and interests of oil importers, the PSO was tasked with importing the LNG directly from Qatar through a government-to-government deal which is yet to be signed.
Majority of oil importers in Pakistan gave their imported crude oil to refineries to obtain finished petroleum products and sell furnace oil directly to the industrial sector. Some companies directly import diesel. Majority of oil companies which import furnace oil or diesel are however of the view that there is shortage of both these fuels in the country and demand of industrial and power sector is hardly met with. Senior officials representing these companies which import these fuels maintain that in this situation no question of wishing to stop LNG import arises as these both fuels will remain very much relevant and will be needed in quantities as they are required today no matter how much LNG is imported.
Energy experts say delay or halt in LNG import will inflict loss of hundreds of billions of rupees on the national exchequer.
According to initial calculations, successful use of LNG in power sector will enable the government to save more than Rs250 billion after December 2015.
Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi when confronted by this correspondent on the question that even according to official correspondence of Ministry of Water and Power LNG will cost more for the production of electricity compared to furnace oil as fuel, responded that electricity produced by using RLNG will be much cheaper compared to electricity produced through furnace oil.
“I am here. Please call me and arrange an open debate. I challenge anyone to come up with one’s figures of the break-up of cost of electricity produced using furnace oil as fuel and RLNG as fuel and have an open debate with me. I will prove that RLNG will be much cheaper as compared to all other fuels,” Abbasi said.
The minister claimed that he knew that certain people were propagating wrong facts intentionally at the behest of oil importers lobby.
Abbasi said it was absolutely wrong to state that the RLNG will not replace furnace oil in the power generation sector and maintained that RLNG will decrease furnace oil imports to a big level.
Khaqan said many economies were switching to RLNG-based power generation and Pakistan was taking this step at a very right time.
He said long-term deal of such a fuel is always a hectic process with dozens of formalities to fulfil and issues to be addressed but ‘we have completed almost everything and LNG imported to Pakistan will be the cheapest in the region’.