close
Advertisement
Can't connect right now! retry

add The News to homescreen

tap to bring up your browser menu and select 'Add to homescreen' to pin the The News web app

Got it!

add The News to homescreen

tap to bring up your browser menu and select 'Add to homescreen' to pin the The News web app

Got it!
April 10, 2019

Saudi Aramco eyes first LNG sale with overture to Pakistan: Bloomberg

Business

April 10, 2019

KARACHI: The world’s largest oil company is moving into the world of liquefied natural gas, offering to supply Pakistan with cargoes of the fuel even though it doesn’t produce any, according to a Pakistan government official, Bloomberg reported on Tuesday.

Saudi Aramco Products Trading Co, the merchant arm of Saudi Aramco, has expressed interest in selling LNG cargoes on a spot or short-term basis to Pakistan, Nadeem Babar, head of Prime Minister Imran Khan’s task force on energy reforms, said by phone. Aramco will send a delegation to Pakistan this week to discuss the proposal further, he said. An Aramco spokesperson declined to comment.

Any sale of LNG would be a first for the world’s largest producer of crude oil. Aramco doesn’t produce any LNG, but in January it hired an employee from Singapore’s Pavilion Energy Pte Ltd. to develop its LNG business, focusing on trading and marketing. The energy giant, which is in the midst of a high-profile bond sale, has been looking at gas assets in Russia, Australia and the U.S., Saudi Energy Minister Khalid Al-Falih said last month.

Natural gas, which emits less carbon than oil or coal when burned, is expected to be the fastest-growing fossil fuel, with demand seen expanding 43 percent through 2040, versus 10 percent for oil, according to the International Energy Agency. Saudi Arabia is also planning to boost its use of natural gas at home to replace oil-fueled electricity generation. Pakistan imports nearly 80 percent of energy requirements from the international market. The country’s demand for energy has been increasing by 8 percent a year.

Pakistan’s domestic gas output has plateaued in the last five years, falling to 1.46 trillion cubic feet in 2017/18, from 1.51 trillion cubic feet in 2012/2013, according to an annual report from the Petroleum Ministry. This has led to severe gas shortages as Pakistan’s population, now at 208 million people, has risen sharply over the same period, driving fuel demand from industries and new power plants higher.

Gas demand was estimated at 6.9 billion cubic feet per day for 2017/18, according to Pakistan’s Oil & Gas Regulatory Authority, nearly 3 billion cubic feet more than daily output.

To help plug the deficit, Pakistan has built two liquefied natural gas (LNG) import terminals, and demand is expected to hit 6.97 billion cubic feet a day for 2018/19, and 7.06 billion cubic feet a day in 2019/20.

With such demand levels—and rising, too—Pakistan is naturally an attractive destination for gas exploiters. Russia, Iran, and Qatar are all large suppliers. Last month, the government was negotiating an increase in Qatari LNG imports from 500 billion cubic feet daily to 700 billion cubic feet daily. In Februray, the government also inked an import deal with Gazprom for 500 million to one billion cubic feet daily.

Topstory minus plus

Opinion minus plus

Newspost minus plus

Editorial minus plus

National minus plus

World minus plus

Sports minus plus

Business minus plus

Karachi minus plus

Lahore minus plus

Islamabad minus plus

Peshawar minus plus