Ogra to complete LNG price determination within a month

ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) is going to determine the price of the imported Liquefied Natural Gas (LNG) within a month, while the 683-miles North-South gas pipeline stretching from the country’s southern port city of Karachi to Lahore in Northeast will also get completed in the same month.
Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi, in his third consecutive news conference on the issue of LNG in last three days, said this on Thursday and added that ‘oil mafia’ was creating hurdles in LNG import and is even paying bribes to the concerned officials for not installing plants.
Minister said that Ogra has collected all the relevant documents from the Pakistan State Oil (PSO) to determine the price that will include taxes, tolling fee, administrative charges, and distribution and supply charges.
For the last one and a half-year, the government is negotiating a Sale-Purchase agreement [SPA] with the Qatar government, but it awaits the Ogra decision of determination of tolling of the Sui Northern Gas Pipeline Ltd (SNGPL) and Sui Southern Gas Company Limited (SSGCL). Both of the gas utilities are demanding 52 cents and 28 cent/mmbtu respectively which is not justified.
He further said that the government has also completed its homework for setting up LNG terminals in the country. He termed the LNG as the best source of cheap energy than other thermal sources and even natural gas.
“If we convert all the oil-based independent power producers [IPPs] to the LNG, it will save around 200 billion rupees. This LNG will be cheaper than that in China, India, Japan and Korea.”
Pakistani economy has been facing a severe energy crisis. Its local output of the natural gas is around four billion cubic feet a day, while demand is around six to 6.5 billion cubic feet. To plug the gap, as to run factories, feed houses and generate energy, the government has worked to sort the issue out on war footing.
The minister said that we have added 600 megawatt Re-Gasified LNG (RLNG)-based electricity has been added to the national grid. Other RLNG-based power projects of 3,600 megawatts are in advanced stages and will be able to start adding energy into the system by summer 2017.
Engro Corporation after a bidding process to build a LNG terminal-I at Port Qasim, has completed the project within in 11 months after spending $150 million as capital cost. It also took a floating storage re-gasification unit (FSRU) on lease which having the capacity to deliver 600 million cubic feet/day natural gas directly to Sui Southern Gas Company’s (SSGC) natural gas pipeline system.
Almost all the issues creating hurdles in the agreement for the LNG agreement have been resolved.
“Only the issues related to price mechanisms and Letter of Credit has yet to resolve but we are hopeful to sort it out by the first week of October” the minister added.