Govt strategy to help boost LNG supply to system

ISLAMABAD: The coalition government has carved out a multi-pronged strategy to increase the supply of LNG in the country’s system in the coming winter season under which it has allowed the existing terminals to use their excess capacity for importing the gaseous fuel to cater to the country’s needs, The News has learnt.

“This government action will change Pakistan’s LNG scenario as the private sector will start importing the LNG and selling it to the consumers under the third-party access rules (TPA),” a senior official at the Energy Ministry told The News.

“Currently, the PSO and PLL are importing the product and selling it to Sui gas companies that provide the LNG to power, export, fertilizer, and in the winter season to the domestic sector too.”

The country has two LNG terminals— one owned by Engro Elengy Terminal Private Limited (EETPL) and the other by Pakistan Gas Port Consortium Limited (PGPCL).

The FSRU (Floating Storage Regasification Unit) anchored at PGPCL terminal has an additional capacity to re-gasify the LNG of 150 mmcfd and the FSRU at EETPL terminal has a spare capacity of 50 mmcfd that can also be enhanced to 90-100mmcfd.

The government’s 100 percent owned company -Pakistan LNG Limited (PLL)- has already signed an agreement allowing the PGPCL to use its excess capacity for importing one LNG cargo a month.

Both the parties -PLL and PGPCL- signed the agreement on August 3, 2022 under OSA (Operations and Services Agreement).

According to the same official, the ECC that meets next week will approve the agreement signed between PLL and PGPCL and after approval by the ECC and ratification by Cabinet, the PGPCL will be able to bring one LNG cargo a month.

The PGPCL has entered an agreement with UGDC (universal gas distribution companies) owned by Ghyias Paracha, who is also chairman of All Pakistan CNG Association for purchasing its LNG.

"UGDC will provide the gas to private sector consumers such as the CNG sector and general industry," Paracha said.

Under the agreement of which copy is available with The News, out of total physical capacity of the FSRU of 750 mmcfd owned by the PGPCL, the PLL will have unconditional access to peak daily delivery of 650 mmcfd for 300 days (to be increased to 350 days subject to OCT (offshore container terminal schedule) and 690 mmcfd for 45 days on operative’s reasonable endeavors basis in accordance with clause 9.3.5 of the agreement subject to unloading of a maximum of 4.5 million tonnes per annum (MTPA) of LNG by the PLL at the the PGPCL terminal.

The agreement also states that PLL will have berthing priority for its cargoes; however, both parties will work together for managing berthing slots and there will be no restriction on using the storage by either party.

And if the PLL suffers any demurrages or loss as a consequence of the failure of the third party or operator, then the PGPCL will bear the loss to be suffered by the PLL and will indemnify the PLL in any such instance.

The PLL on the other hand will not take any additional liabilities, nor incur any extra costs for facilitating the import of private sector LNG cargoes, as per the agreement.