Govt discusses LNG supply deal with Saudi Aramco

ISLAMABAD: A delegation of the world’s biggest crude oil producer Saudi Aramco has visited Pakistan to discuss a deal of liquefied natural gas (LNG) supply with Pakistan that might see its LNG demand triple in the next three to five years, a senior official said on Saturday.

“A delegation of Saudi Aramco arrived in Pakistan to discuss sale of LNG with us,” the official, privy to the development, told The News. “But nothing has finalised,” the official said. The delegation reached later this week, according to sources.

Pakistan’s LNG import could increase to as high as 15 million tons this year from seven million tons last year.

The fuel import would further grow to 25 million to 30 million tons over the next three to five years, a government official told Reuters, making the country a global big LNG consumer.

Currently, the country has two LNG terminals having a regasification capacity of 1.3 billion cubic feet per day (bcfd).

Domestic gas demand was estimated at 6.9 bcfd for 2017/18 as opposed to 3 bcfd production, causing severe gas shortages in the country of 208 million.

“We need two more such terminals,” Nadeem Babar, head of Prime Minister Imran Khan’s task force on energy reforms said.

Sources said the government is in talks with 15 LNG suppliers, including Indonesia, Qatar, Italy, Saudi Arabia, UAE, Malaysia and others.

“We would import LNG from the country where we get good price,” an official said.

Saudi Arabia, UAE and Malaysia have also offered Pakistan to ship LNG cargoes and they have already quoted the prices which are less than what Pakistan is currently getting from Qatar under a 15-year agreement.

On Thursday, a UAE-based oil and

gas company Mubadala Petroleum has also expressed its interest in supplying LNG, oil and gas exploration projects and

establishment of first propylene gas plant in the country.

Mubadala Petroleum Chief

Executive Officer Musabbeh Al Kaabi expressed the company’s interest in the projects during a meeting with the Minister for Petroleum and Natural Resources Ghulam Sarwar Khan.

An estimate said energy shortfall in the country could shear GDP growth by two percentage points.

International financial institutions have already projected the country’s growth to sharply fall to 2.5 to 3 percent during the current fiscal year from 5.2 percent in the previous fiscal year.

Last government initiated various energy projects under the China-Pakistan Economic Corridor framework and managed to overcome energy crisis.

But, the gap between energy demand and supply is again increasing rapidly, calling for more energy resources.

The government is encouraging foreign oil and gas exploration companies to come and invest in Pakistan, but as the projects take time the LNG supply offers quick relief.

Saudi Aramco takes Pakistan’s route to

expand into a new LNG business domain and it wants to supply liquefied natural gas cargoes to the country on a spot or short-term basis.

The energy behemoth doesn’t produce LNG, but it is developing LNG business centered on trading and marketing of the supercool fuel.