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Markets PSO (Pakistan State Oil Company Limited) 165.40 Increased By ▲ 2.03%

PSO eyes building $500mn LNG terminal near Karachi: report

  • State-owned corporation also intends to enter digital payments sector, planning to apply for a licence to become a mobile wallet operator, says CEO
Published September 19, 2022
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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.”

Comments

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Anjum Noor Khan Sep 19, 2022 10:49pm
Excellent move by PSO in the larger interest of the country and ultimately in the benefit of people of Pakistan
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Owais Sep 20, 2022 12:14am
Yes the diversification is the need of time for PSO. Other state owned commercial organizatios should also think for diversification as well in the interst of our beloved country.
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MalikSaabSays Sep 20, 2022 09:01am
Following in the long tradition of state institutions leaving their bounds and messing about in others' domains. PSO is an oil major. There are enough opportunities upstream and downstream in the petroleum sector, and the need is there as well. But no, they had to venture into payments. Whats next? PSO housing authority? PSO fertilizer? PSO cereals?
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Rebirth Sep 20, 2022 10:37am
PSO can’t survive without diversifying it’s investments, including partially owning local and foreign refineries from where it imports crude and refined products. Investing in crude-producing sites should also be considered. Outside of oil, now that they wish to venture into gas, they should consider partial ownership of the SSGC and SNGPL. These enterprises can also clean up their liabilities, as most of their accounts payable are outstanding payments to the PSO. It'll make their books look good and also, exponentially benefit the PSO as it would now own a stake in profitable corporations that were previously in the red. If PSO’s buying spree is successful, they could soon buy the “zamir” of our politicians and elect a VP to start wars in oil-producing nations. That will comfortably bankrupt our economy that the PSO would’ve made prosperous, itself. And then, we will become indebted to China. Although, we already are but that’ll be our version of the capitalist “business cycle”.
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Shahzad Sep 20, 2022 08:58pm
Is it on PIBTL or on PICT
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