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Sunday April 14, 2024

Govt okays RLNG supply to new domestic consumers

RLNG cost of over $12 per MMBtu (Rs3700 per MMBtu) will fully be recovered from the dwellers of the housing societies

By Khalid Mustafa
February 22, 2024
The picture shows an LNG cargo ship. — AFP /File
The picture shows an LNG cargo ship. — AFP /File 

ISLAMABAD: The outgoing caretaker regime has approved the policy to provide RLNG to new domestic consumers and private housing societies, keeping in view the dwindling local natural gas production which has tumbled to 3.2 billion cubic feet per day (bcfd). The Apex Committee of Special Investment Facilitation Council (SIFC) in its 9th meeting, to this effect, has also given the go-ahead and asked the relevant authorities of the Petroleum Division, a senior official of the Energy Ministry told The News. “Yes, we have decided to issue clear directions to the northern and southern gas companies to start giving RLNG connections to all housing societies that are not connected to the natural gas distribution network at full price.”

The RLNG cost of over $12 per MMBtu (Rs3700 per MMBtu) will fully be recovered from the dwellers of the housing societies including transportation and distribution allowed losses. “About 200 housing societies require gas connections, but the government has asked them that local gas production has tumbled to just 3.2bcfd which is further dwindling at a fast pace and only RLNG can be provided to them. The local gas may cater to the country’s needs for six to seven years only.”

Right now, about 3.3 million applications are pending with the gas companies which also include those applicants who reside in areas that are connected to gas transmission and distribution networks. “We will not provide the RLNG connection to those who are connected with the existing gas distribution network as after getting the RLNG gas connection, consumers can take the gas companies to court on the grounds of discrimination in charges.

If the government provides, the official said, the RLNG supply to all 3.3 million applicants, then it will have to import 800 mmcfd of gas for which a new LNG terminal is needed to import the LNG. However, for housing societies with just 50,000 applicants, only 10-20 mmcfd RNLG is enough.

The officials said, “So we have decided to provide the RLNG at full price to the housing societies instead of local gas. There has never been a moratorium on the provision of RLNG to housing societies, but gas companies were under the wrong impression because of the moratorium imposed on local gas connections despite a decision by the federal cabinet in 2017 under which the ban on gas connections based on local gas was imposed, but not on RLNG connection.”

They said, “Now the Petroleum Division authorities have decided to issue clear directions to the gas companies to this effect so that they can start giving the RLNG gas connections to housing societies that are not connected to the existing distribution network.”