Govt soon to supply RLNG to commercial consumers

LAHORE: Government will soon start offering re-gasified liquefied natural gas (RLNG) connections to commercial consumers for the first time as locally-produced gas is not available for them in the Punjab, officials said on Friday.

Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi confirmed that the government planned to supply RLNG to commercial consumers.  Ample RLNG supplies are available for domestic use and it would be a wise move to utilise the fuel wherever required, Abbasi said. 

For the last five years, there had been a moratorium on issuance of new gas connections for commercial consumers. The present government, however, took an initiative and recently withdrew ban on new commercial connections.

Commercial consumers include cafes, bakeries, milk shops, tea stalls, canteens, barber shops, laundries, hotels, malls, cinemas, clubs, theatres, private offices and corporate firms.

Petroleum minister said the country would have 1.5 billion cubic feet per day (bcfd) of LNG in the system by this year-end. He, at an event this week, said the first LNG terminal is already handling 600 mmcfd (million cubic feet/day) of gas, while the second terminal would be operational within the next two months. 

The country’s domestic gas production has been stagnant at four bcfd for the last 15 years while the demand is around seven bcfd, indicating a demand and supply gap of three bcfd.

System gas is available to consumers in Sindh, Khyber Pakhtunkhwa and Balochistan, but there is a restriction on new gas consumers in the Punjab to benefit from cheap gas due to provisions in the constitution. Such consumers in the province currently have no option than to buy costly liquefied petroleum gas (LPG).

Even after the ban lift, commercial consumers in the the Punjab would get comparatively costly gas in the form of RLNG. Commercial consumers in the province, for instance, will pay 30 percent more for RLNG compared with the tariff of system gas, which is being offered to commercial consumers in other provinces.

Yet, the RLNG tariff will be 50 percent cheaper than LPG, which is available in cylinder. RLNG will be a preferred choice for commercial consumers in the Punjab as it will be available through gas network. 

“The consumers have two choices: they stay like they are today without gas or go for a sustained supply of piped gas in the form of RLNG,” said an official.

The RLNG tariff will not remain constant as it changes every month based on an average cargo price in a previous month.

The official said the present government has been able to reduce shortage of gas in the country while successfully opening window of imported or RLNG gas. RLNG would not go to domestic consumers, he added. 

“We have already managed to give 1.5 million new connections to domestic consumers,” said a senior official. But, he added, offering RLNG to all consumers should be considered a forward looking approach as it will help in further reducing gap in gas demand and supply in the country.

The official denied an impression that issuance of RLNG-based connections to commercial consumers would hurt LPG business. “Plenty of business is there for everybody working in energy sector,” added the official.

A founding member of the All Pakistan LPG Distributors Association said the government’s decision to provide RLNG to commercial consumers would definitely hurt business of LPG producers and marketing companies. 

The association’s member said LPG has successfully made inroads into the segment of commercial consumers in the past several years. Commercial entities in the province are regular buyers of LPG throughout a year. However, he feared that the proposed LNG supply would definitely dent LPG sector. —Munawar Hasan