LNG import unlikely to resolve gas shortage

ISLAMABAD: Although the first shipment of 60,000 tons of imported liquefied natural gas (LNG) is arriving from Qatar today (Thursday), it will not resolve the issue of gas shortage as the entire supply will be transferred to power generation companies which may result in slight reduction in power outages in the country.
According to a top official of the Ministry of Petroleum, the country will start receiving 200 million cubic feet per day (mmcfd) from next month but not a single unit of gas will be included in national gas supply chain which is currently facing a shortage of 2,000 mmcfd. Pakistan’s total production of natural gas is about 4,000 mmcfd, while demand is closer to 6,000 mmcfd.
The shipment from Qatar will also provide no immediate relief for the compressed natural gas (CNG) sector as currently no arrangements have been made to supply LNG to CNG stations although the ministry has asked the industry to independently import the gas.
When contacted by The News, Minister for Petroleum Shahid Khaqan Abbasi agreed that gas shortage will remain after the import of LNG but claimed that after a few months the amount of imported LNG will be raised to 400 mmcfd.
He said the pricing formula of imported LNG is being negotiated with Qatar Gas but assured that the final price will be less than $8 per million British thermal units (mmbtu) which is competitive with the prices being paid by other countries in the region. The minister said prices of LNG cannot be made public officially as per international norms but journalists will be able to investigate the price once the deal is finalised. “The entire process will be transparent and maximum efforts will be made to strike the best possible deal for the country,” he said.
Sources in the Ministry of Petroleum said currently Sui Northern Gas Pipelines Limited (SNGPL) is providing 275 mmcfd from its system for power generation while Sui Southern Gas Company is providing 195 mmfcd to the power sector. The power sector is also getting 497 mmcfd directly from the petroleum exploration companies. In total 975 mmcfd natural gas is being utilised by power sector and the import of LNG will raise this to 1,175 mmcfd.
According to experts, one mmcfd is sufficient to produce five to six megawatts of electricity so the imported LNG will result in extra production of around 1,000MW of power. The imported LNG will be provided to four IPPs and Kapco for generation of electricity.Currently Pakistan’s power shortfall is more than 4,000MW and it is expected that imported LNG will help reduce load-shedding in the summer season.