Pakistan’s import of liquefied natural gas (LNG) has reached seven million tons a year since launch of the first terminal three years back, industry officials said on Monday.
ISLAMABAD: Pakistan’s import of liquefied natural gas (LNG) has reached seven million tons a year since launch of the first terminal three years back, industry officials said on Monday.
The officials said power and other industrial sectors are eying nine million tons a year as energy demand is rapidly increasing. Four million tons of LNG has been imported alone since January.
Regasified- (RLNG) based power generation occupies more than one-fourth in the country’s total energy mix — the largest share after the hydropower generation.
RLNG share in power generation increased to 25.59 percent in July from 12.12 percent in the corresponding month a year earlier, while share of residual fuel oil (RFO) decreased to 9.34 percent from 25.59 percent during the period, the Central Power Purchasing Agency’s data showed.
Currently, there are three RLNG-based power plants of 3,600 megawatts operating in the country. Demand for gas in fertiliser sector is also high with some fertiliser plants non-operational for the last one year due to gas shortage. This has resulted in increase in local demand and price of the urea and other fertilisers in the market, industrial officials said.
Currently, there are two LNG terminals operational at Port Qasim that handle imported LNG with a combine re-gasification capacity of approximately 1.2 billion cubic feet of gas per day (bcfd), but the current handling is less than one bcfd. The government planned to install more terminals with the private sector investment.
The officials said the two terminals have so far handled 200 LNG cargos. Power plants based on RLNG are more than 60 percent efficient compared to 40 percent in furnace oil. The cost of power generation from super cool RLNG is also less than other imported fuels. RLNG is substituting other fuels and the share of residual fuel oil- (RFO) based generation is sharply declining.
Though the imported LNG price is directly linked to crude oil price in the international market it is much economical than other alternate power sources while comparing their power generation capacities and per unit costs.
In July, the cost of unit electricity generated from RLNG was Rs9.72 while from RFO, it was Rs13.55/unit. In the same month last year, the power generation cost was Rs7.52/unit from RLNG while it was Rs9.306/unit from RFO.
RLNG also costs less than furnace oil. High sulfur furnace oil costs $16.3/million British thermal unit (mmbtu), while RLNG costs just $10.46/mmbtu.
RFO-based electricity generation cost increased 45 percent over the last year, while cost of RLNG-based power generation rose 29 percent. The country has so far saved up to $2.6 billion through replacing furnace oil and diesel with imported gas.
Officials said energy crisis hit hard the industrial sector before LNG imports and it took away two percentage points of GDP growth. The government used to pay capacity charge (idle charges) to natural gas power plants on shortage of gas. It also jacked up electricity charges.
Several power plants were operating at less than 50 percent service factor on diesel, which is very expensive fuel compared to LNG which is much cheaper than diesel. Textile, fertiliser and compressed natural gas businesses were the worst hit commercial sectors while millions of masses also badly suffered due to the power and gas shortages in the country.