Pakistan soon to sign LNG supply contracts with Qatar: minister

KARACHI: Pakistan will soon sign liquefied natural gas (LNG) supply contracts with Qatar and its prices will be up to 50 percent lower than those of liquid fuel, a minister said on Saturday.
“We will soon sign long-term as well as short-term contracts for LNG supply [with Qatar],” said Shahid Khaqan Abbasi, Minister of Petroleum and Natural Resources, speaking at the plaque unveiling ceremony of Admore’s Shikarpur terminal facility and Daulatpur depot.
Abbasi said LNG prices have not finalised as yet.
“LNG prices will be 15 percent to 50 percent lower compared with diesel, HSFO (high sulphur furnace oil) and LSFO (low sulphur furnace oil),” he added however.
He said the commodity will initially be used to replace diesel and other fuels in the energy generation sector.
Pakistan currently faces a gas shortage of around 2,000 mmcfd per day.
Under the proposed deal, Qatar is likely to supply 500 mmcfd per day for 15 years.
The minister Abbasi said LNG is a near-term solution to the country’s energy crisis.
Imported gas is to mitigate the reliance over costly liquid fuels, he added. “There is no second opinion on that.”
He said the government is taking initiatives to deal with energy issues, but the industry support is also required.
To a question about gas tariff hike, the minister said that they had forwarded their inputs to the Oil and Gas Regulatory Authority, adding that the authority’s decision would shortly surface.
Abbasi appreciated Admore Gas (Pvt) Limited for establishing the storage terminal and deport.
He said lack of fuel storage capacity results in supply chain issues as it happened in January this year.
“Country direly needs additional capacity to store at least 100,000 tons of fuel for which the private sector oil marketing companies (OMCs) should play their part,” he added.
He rejected the impression that fuel prices are high as unjustified.
He said prices of petroleum, oil and lubricant (POL) products in Pakistan are lowest in the world.
He added that the impact of lower international oil prices was duly passed on to the consumers.
“Every country imposes taxes and levies on POL products, which is a major source of government revenue,” he said. “Most of the European countries derive 40 percent of their revenues from petroleum products.”
Irfan Qureshi, Managing Director Admore Gas said government should reduce taxes on POL products to support refineries and OMCs.
Admore, having an annual turnover of Rs4.0 billion, has its footprints in health, education and financial services industries.
The company is setting up a terminal at Shikarpur with a cost of $4.9 million. Having a capacity of 3,200 tons, the project will be completed by December 2016.
The Daulatpur depot, with 2,400 tons capacity, will be ready for operation with a cost of $1.6 million this yearend.
Admore has planned capital investment to the tune of $2.0 million in the expansion of its retail network.