ISLAMABAD: Under the Third Party Access rules, the government has once again asked the private sector to import LNG by using the unutilized capacity of the government against 600 mmcfd available...
ISLAMABAD: Under the Third Party Access (TPA) rules, the government has once again asked the private sector to import LNG by using the unutilized capacity of the government against 600 mmcfd (million cubic feet per day) available at PGPL LNG terminal and to this effect Pakistan LNG Limited has issued an advertisement to national dailies, seeking the interest of private sector companies to utilise the government’s capacity, a senior official at the Petroleum Division told The News.
The government has apparently issued the ad offloading its capacity for six months, but for the first three months i.e. February, March and April of the calendar year 2021, the capacity to import LNG in the range of 100-250 mmcfd will be offloaded to the private sector as per the cabinet decision. However, for the next three months, the interest of private sector companies will be gauged for future planning, industrial sources also confirmed this to The News.
“The agreement between PLL and the private sector for offloading the capacity will be approved by OGRA. In addition, the price of services will also be determined by OGRA.”
The PLL earlier offloaded some of its capacity in the range of 150-200 mmcfd to the private sector for months of October, November 2020 and February and March 2021, but it did not allow the private sector to import LNG because of some technical issues. "Now the issues got resolved and PLL has again sought the interest of interested parties to import LNG by issuing the government’s unutilized capacity."
The decision will help give relief to the Pakistan LNG Limited (PLL), which is bound to pay the capacity charges to the terminal against the offtake of 600 mmcfd per day. Now under this new scenario, the private sector will share the burden of PLL in terms of payment of capacity charges to the terminal. And in return, the private sector will import LNG on its own and provide cheaper RLNG to its consumers. They will use the capacity of the government and transport their product in the pipelines of both the gas utilities -- Sui Northern and Sui Southern.
The PLL utilizes its contracted capacity depending upon the requirement of RLNG by the gas utility companies. In order to optimally utilize its contracted capacity, the federal government has authorized the PLL to allocate its unutilized contracted capacity to private parties on short term basis, depending upon the requirement of gas utility companies.
The government official said that Universal Gas Distribution Company (UGDC), a private entity, is all set to utilize the government’s PLL capacity by importing the LNG into the country. UGDC has already signed an LNG supply agreement with US based ExxonMobil and Singapore based Trafigura. ExxonMobil is also a partner of Qatar Gas Company. UGDC intends to provide the imported RLNG to the CNG sector and textile industry.