OGRA plans LPG refrigerant terminals in Karachi to boost energy supply

By Our Correspondent
December 05, 2023

KARACHI: The Oil & Gas Regulatory Authority (OGRA) is looking into a proposal to build liquefied petroleum gas (LPG) refrigerant terminals in Karachi, the country’s biggest city and commercial centre, with a capacity of around 40,000 tonnes, its chairman said on Monday.

“The project would require a large investment and would depend on the interest of investors in the LPG sector,” Masroor Khan, chairman OGRA, said during a visit to the Federation of Pakistan Chambers of Commerce and Industry (FPCCI).

Khan said OGRA was also going to allow 2,000 new LPG bowsers, or tank trucks, and had started issuing licenses for them. “The LPG sector has seen rapid growth in recent years and offers potential investment opportunities for local businesses,” he added.

A worker can be seen loading the LPG cylinder. — AFP/File

He said the field of new LPG cylinders also had huge demand and noted that 2.8 million new cylinders had been added in recent years and more would be required to cater to the growing need for LPG in the country.

“This project will attract $160 million investment. Those who want to grow their businesses must take advantage of these big opportunities and this is a win-win opportunity.” The OGRA chairman said the regulator and FPCCI have agreed to form a working group to materialize investment opportunities in the sector.

“The country currently consumes around 5,000 tonnes of LPG, both imported and locally produced, which accounts for about 1.3 percent of the total national energy mix,” he added. “This share would increase to 5 percent in the next eight years and OGRA is making plans accordingly.”

“Considering the exponential growth, as well as emerging challenges, a new LPG policy is soon being introduced.” He said one source of LPG is the country’s refineries, which produce around 500 tonnes.

Another 500 tonnes come from wellheads, and 2,100 tonnes are imported from Iran. Khan said Engro Corp. and Sui Southern Gas Co., two of the country’s largest energy companies, operate small terminals that can handle LPG vessels with a capacity of 3,500 tonnes at Karachi port. A small terminal is also operating in Gwadar.

Muhammad Ali Haider, convener of FPCCI’s standing committee on LPG, stressed the need to maintain safety standards to ensure the protection of customers and their properties. Haider said some participants of the meeting expressed concerns over the lack of enforcement of standards in the LPG business and called for swift action against violators as substandard cylinders are being manufactured in the country.