LPG to become preferred fuel amid natural gas shortage

LAHORE: Amid growing shortfall of natural gas, liquefied petroleum gas (LPG) is set to become a preferred fuel in the upcoming winter season, despite the government’s negligent behaviour towards the fuel.

As sourcing of natural gas from abroad has not seen any success from the sport market and the long-term deal meet with similar fate, LPG emerged as one of the preferred fuels of domestic and commercial consumers for cooking and heating purposes.

Government too seems to be awakening to the reality of massive natural gas scarcity, where LPG seems to be the only viable option for supplementing the gap.

Despite continuous downward trend in production of local gas, the state-owned enterprises have been in denial for many years when it comes to exploring potential of LPG for meeting cooking and heating needs of domestic and commercial consumers. Sui Northern Gas Company (SNGPL) particularly did not take steps in this direction, despite the fact that liquefied natural gas (LNG) has not been available in lower quantities and obviously at a cost.

However, the new management of SNGPL has finally realised the potential of LPG for meeting energy needs and decided to expand scope of its business by launching LPG marketing through various ventures. According to an announcement made by the gas utility, the Ministry of Energy (Petroleum Division) has advised to explore all possible options to meet energy needs of consumers, including supplying LPG cylinders in view of potential gas shortfall in the forthcoming winter.

Accordingly, the Board of Directors of SNGPL in their meeting dated September 28, 2022, has approved the project of LPG distribution with 100,000 cylinders. The estimated initial investment for the venture is up to Rs1.20 billion.

Moreover, after delays, eventually SNGPL has forayed into establishing LPG distribution network. In this connection, efforts were being made to provide LPG to residents of hilly areas by setting up LGP Air Mix plant. Gas utility also expressed interest to purchase LPG filling and storage plant in Punjab and Federal Capital Territory of Islamabad.

Apart from belated adoption of LPG by SNGPL, the private sector also increasingly takes initiative to supply LPG as piped gas in various localities in the country. Already several large housing societies are in the process of establishing LPG Air mix systems, which is also called synthetic natural gas (SNG), to supply supplying piped gas to their consumers.

This option is both cost effective and time saving vs each household buying and using its own LPG cylinder. Similar solutions exist for apartment buildings.

To meet energy needs in housing colonies, there is a need to set up more SNG systems in towns that are not connected to the main Sui gas supply lines. Presently only a handful are operating in Gwadar, Noshki, Sohrab and Murree; and in near future Gilgit residents may also get this facility.

It should be noted that Pakistan produces approximately 2,000 MT of LPG and imports approximately 2,500 MT per day. Therefore, imports account for a larger share of the market and their size is expected to grow in the coming years.