- State-owned corporation also intends to enter digital payments sector, planning to apply for a licence to become a mobile wallet operator, says CEO
Pakistan State Oil (PSO), the state-owned importer and retailer of petroleum products, is planning to build a $500-million liquefied natural gas (LNG) terminal, as the company seeks to diversify its portfolio, reported Bloomberg on Monday.
The said LNG terminal will be located near the port city of Karachi, the nation’s financial capital, and would be set up in four years, said Chief Executive Officer (CEO) Syed Muhammad Taha in an interview on Friday.
“The company has reached an understanding with a few large customers in this regard and has begun preliminary preparations for the project that will include Pakistan’s first LNG storage facility,” Taha was quoted as saying in the report.
The development comes as the South Asian nation quickly emerges as one of the fastest-growing markets for LNG as it looks to meet its rising energy needs.
As per the latest data shared by the National Electric Power Regulatory Authority (NEPRA), electricity generation from RLNG sources stood at 1,756 GWh in August 2022. However, the cost of electricity generated through RLNG has surged 84% year on year, fuelled by rising fuel costs due to Russia’s war in Ukraine, resulting in frequent power cuts.
"As long as there’s a geopolitical crisis in place, prices will remain elevated, but eventually, they will come down,” Taha said. “As soon as the prices are conducive, we’ll go ahead.”
PSO, which is the country’s largest fuel retailer with a network of 3,500 service stations, may look for a partner for the project, Taha said, while not disclosing key project details, such as whether the terminal would be onshore or floating, or its date of operation.
Pakistan currently has two floating LNG import terminals, both near Karachi. Last year, Qatar said that it plans to build an LNG import terminal in Pakistan.
Meanwhile, the report added that PSO expects demand for petrol and diesel to drop 5% and 7%, respectively, in the ongoing fiscal year.
Moreover, the state-owned corporation also intends to enter into the digital payments sector and is planning to apply for a licence to become a mobile wallet operator, and eventually start a digital bank, shared Taha, adding that Rs1 billion has been allocated to set up a venture capital fund.
“So going forward our objective is very clear,” Taha said. “We want to venture into different areas.”