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December 7, 2018

Govt mulls RLNG mixing for gas supply to domestic consumers

Business

December 7, 2018

ISLAMABAD: Government is mulling to mix regasified liquefied natural gas (RLNG) with system gas to meet growing demand of domestic consumers, well-placed sources said on Thursday, suggesting a rise in tariffs as imported fuel is relatively costly.

Ministry of energy (petroleum division) has already put forward the proposal of mixing local gas and RLNG, they added.

“It (ministry) will take the proposal to the cabinet for approval after taking the parliamentary party into confidence,” a source said.

“If all things go well, we (ministry) will also revise the gas pricing, as the RLNG is costlier than the system gas.”

The Economic Coordination Committee (ECC) in September approved upward revision in RLNG-system gas ratio to 50/50 for supply to five zero-rated industries: textile, carpets, leather, sports and surgical goods.

The sources further said the federal cabinet that met with the Prime Minister Imran Khan in the chair on Thursday approved Rs25.75 billion as supplementary grant to provide subsidised RNLG to zero-rated export-oriented industry as well as to their captive plants. The cabinet also ratified the decision of the ECC to provide Rs5.5 billion as subsidy to the fertiliser plants to produce urea at affordable price for agriculture sector.

The sources, citing the meeting, said the government has made 13 oil and gas discoveries since August and discovered 105.18 million metric cubic feet/day (mmcfd) of gas and 5,358 barrels/day (bpd) of crude oil.

Province-wise data showed that 23 mmcfd of gas and 91bpd of oil were discovered by Pakistan Petroleum Limited in Sanghar. Another 1,056bpd of oil and 6.48mmcfd of gas were discovered in Ghotki in September by OMV Maurice.

In October, 6.3mmcfd of gas was discovered in Tando M Khan. Another discovery of 9.5mmcfd was discovered in the same month in Tando Aallah Yar.

In December, Pakistan Petroleum Limited made two discoveries in Sindh: 18.6mmcfd of gas and 160bpd of oil in Sanghar and another discovery of nine mmcfd of gas was made in Sajawal.

In Badin, crude oil discovery of 1,661bpd was made on 3 December. On 29 October, another discovery of 31mmcfd of gas was made in Sindh.

In September, crude oil of 313bpd was discovered in Chakwal.

In September, 550bpd of oil and 1.3mmcfd of gas were discovered in Kohat by Oil and Gas Development Company. Another discovery of 27bpd oil was also made in Khyber Pakhtunkhwa.

In Balochistan, 1,500bpd of crude oil was discovered in Ziarat block of Kachi district in September by Mari Petroleum Company Limited.

Khyber Pakhtunkhwa has gas production of 400mmcfd and its demand is 300mmcfd and remaining is consumed by Punjab. Balochistan has 2,800mcfd of gas production and it is consuming 15 percent of it. Sindh is self sufficient while Punjab has no sizable discovery.

Sources said Sui Northern Gas Pipelines Limited, which is catering Punjab and Khyber Pakhtunkhwa, has no representation from the latter in the board. Khyber Pakhtunkhwa and Balochistan have no major representation in the Oil and Gas Development Company.

Minister for Petroleum Ghulam Sarwar Khan asked chief minister of provinces to send their nominations for the boards, which are going to be reconstituted, the sources said. The government is considering liquefied petroleum gas air mix plants for Hunza, Gilgit, Diamer-Chilas, Skardo, Muzafarabad, Bagh, Azad Jammu and Kashmir, Kalam, and Natyagali.

In developed world, natural gas is consumed for industrial sector while we are burning it for cooking meals. The government would complete the ongoing projects of gas supply that have already been started by previous government and have funding and surveys, the sources added.

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