OGRA slashes RLNG prices up to 5.97pc

ISLAMABAD: The government has slashed the prices of Re-gasified Liquefied Natural Gas (RLNG) for the month of March by 2.78 percent for Sui Northern Gas Pipelines Limited (SNGPL) and 5.977 percent for Sui Southern Gas Company (SSGC) over the previous month, The News learnt on Monday.

The Oil and Gas Regulatory Authority (Ogra) has set the new prices for the consumers of SNGPL and SSGC at $10.3042/mmbtu and $10.2543/mmbtu, respectively.

For February 2019, the price for SNGPL and SSGC was $10.5993/mmbtu and$10.9062/mmbtu, respectively.

It’s noteworthy that the government had also reduced the prices for Sui Northern

Gas Pipelines Limited by 3.97 percent to $10.599/mmbtu and for Sui Southern Gas Company by 4.10 percent to $10.906/mmbtu for February 2019.

The price of super-cooled gas [LNG] is pegged with the crude oil prices, and it was expected that due to decline in international oil prices the local consumers of the RLNG would get a sizable cushion.

These prices also include charges of the LNG terminals, transmission losses, port charges, and margins of the importers i.e. Pakistan State Oil (PSO) and Pakistan LNG Limited (PLL). These new weighted average sale prices of RLNG have been computed, based on the 10 cargoes imported during the month of which six were imported by PSO and four by Pakistan LNG Limited.

Ogra says gas shortage in the country is expected to reach four billion cubic feet/

day (bcfd), almost equal to current total supplies, in two years and would go beyond 6.6 bcfd by 2030.

Gas shortfall is expected to reach 3.999 bcfd by fiscal year 2019/20 and the shortage would reach 6.611 bcfd without imported gas by 2029/30, Ogra said in a latest report.

The regulator attributed the rise in demand and consumption by residential and domestic consumers to price differential vis-à-vis other competing fuels: liquefied petroleum gas, firewood, and coal.

Pakistan relies on natural gas to meet almost half of its energy needs but its proven gas reserves have dwindled in the recent years, as consumption has outweighed new discoveries.

Liquefied natural gas imports are gradually substituting domestic gas and the government’s objective is to raise the share of imported gas in the nation’s energy mix by reducing use of polluting and inefficient furnace oil and expensive diesel oil in power generation.

The share of these imports in power generation has been continuously rising since the last three years, which resulted in the phasing out of more expensive furnace oil-based power plants.

LNG import has surpassed seven million tons a year since launch of the first terminal three years back. It is expected to reach near 24 million tons a year by 2023, according to S&P Global Platts, a provider of energy and commodities information.

Currently, the country has two terminals: Engro Elengy and Pakistan Gasport with 600 mmcfd of re-gasification capacity each.