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November 26, 2020

Media campaign being run against govt on LNG: SAPM

Top Story

November 26, 2020

ISLAMABAD: Special Assistant to PM (SAPM) on Petroleum Nadeem Babar Wednesday alleged a negative media campaign was being run against the government on the LNG through untrue statistics.

Talking to the media along with Federal Minister for Information and Broadcasting Senator Shibli Faraz, he said that the RLNG price was around Rs1,150/mmbtu while the system gas (local) price was around half of it. He added that if buyers were ready to buy RLNG at double the rate of the local gas price, the government would import and sell it to them, but in absence of demand, it won’t be imported. Under the long-term Qatar agreement, 800 mmcfd of gas is imported.

Since September 2018 (27 months), the government imported 35 cargos of LNG at 20 percent lower rate as compared to expensive LNG agreements signed by the previous government with Qatar. “Our government imported LNG at average 10.4 percent of Brent on-spot rate as compared with 13.37 percent being imported under Qatar agreement”, he said. One cargo cost around $25 million, he said.

The SAPM clarified that in nine months of these 27 months, the demand was less than 800mmcfd, but under the Qatar agreement, 800mmcfd gas was to be imported. There was no legal provision in the agreement to reduce the import, he added.

Nadeem Babar said private sector had been allowed to construct LNG terminals. Under the previous government, two LNG terminals were established with a state guarantee of running those facilities, inflicting huge costs on the national exchequer. They are given half-a-million-dollar per day as capacity charges — $170 million per year, he added.

RLNG was given to K-Electric for power generation in summer to facilitate Karachi’s people under temporary arrangement. The K-E is a private company and it has to arrange its own power generation sources now, he maintained.