KARACHI: A Japanese firm has secured a licence to set up and operate re-gasified liquefied natural gas (RLNG) terminal in the country, The News learnt on Monday.
Officials said Tabeer Energy (Pvt) Ltd, a subsidiary of Diamond Gas International of Mitsubishi Corp., got a provisional licence for construction and operation of RLNG terminal in Pakistan.
Financial and other details of the upcoming project could not be obtained. Tabeer Energy, formed in January followed by a formation of a subsidiary Tabeer Energy Marketing (Pvt) Ltd, will venture into sales andmarketing of LNG. The government has already issued licences to Bahria Foundation, Global Energy Infrastructure and Energas Terminal to develop and operate LNG terminals in the country that has two terminals of 1.2bcfd regasification capacity, operated by Pakistan Gas Port and Engro Elengy. The country has imported millions of tons of LNG in the last three years. Around 80 percent of imports have been under long- and medium-term supply agreements, and the remaining was purchased on spot rates.
A highly-developed pipeline grid, extensive industrial demand and the biggest natural gas-powered vehicle fleet in Asia after China and Iran make Pakistan an easy fit for LNG and official estimates show imports could jump fivefold to 30 million tons per annum by 2022.
Analysts said Pakistan is facing an increasing shortfall of natural gas supply aggravated by declining indigenous gas production. The current shortfall is approximately two bcfd, which is projected to increase to up to four bcfd – equal to almost current supplies – by 2020 unless new gas import projects begin.
Analysts said privately-funded integrated LNG import projects linking supply to downstream gas markets will help bridge the LNG supply gap, provide supply stability in power, industrial, and CNG sectors, significantly transfer the financial burden and risk from the public to the private sector and contribute to tax revenues. A joint venture of Shell, Engro, Gunvor and Fatima Group also planned to start LNG merchant terminal by the second quarter of 2020. The terminal will have the re-gasification capacity of 750 million metric cubic feet/day.
Analysts said the new government will have to resolve the gas pricing issue as imported gas is very expensive compared to domestic gas. Imported gas follows international market whereas domestic gas pricing is set under political consideration. Imported gas is, however, extremely cheaper alternate to furnace oil, diesel, motor gasoline and liquefied petroleum gas. It gives huge cost benefits in transport and power sectors.