ISLAMABAD: Consumers of both gas companies- the Sui Northern Gas Pipeline Limited (SNGPL) and the Sui Southern Gas Company (SSGC) will face gas load-shedding in the coming winter despite additional RLNG cargoes secured for January and February 2023.
State Minister for Energy (Petroleum Division) Musadiq Malik stated this before the Senate Standing Committee on Petroleum on Monday here at the Parliament House. Mohammad Abdul Qadir chaired the meeting.
He said that Pakistan LNG Ltd (PLL) has procured 10 LNG cargos for December 2022, nine cargoes for January, and eight cargos for February 2023.
“Despite importing 100 mmcfd gas or one cargo additional for January and February 2023 as compared with the same month of 2022, the government has to implement the gas rationalisation plan to meet the growing demand in winter,” he said.
Responding to a question regarding any decision for increasing the gas price in winter, the minister said that the gas would be available atthe current price.
He further said that the Petroleum Division would ask the Finance Division for a supplementary grant for price differential for the import of LNG in winter as the subsidy was not budgeted in the current fiscal year 2022-23. “In case the government does not realise the funds then it will add to the circular debt of oil and gas”, he maintained.
He said the LNG spot prices internationally were volatile, however, the government was in negotiation with central Asian countries such as Turkmenistan, Azerbaijan, and Kazakhstan for LNG long-term agreements under a government-to-government (G-to-G) agreement as LNG prices could not be predictable.
He further said that the government-owned gas companies, the SNGPL, the SSGC, the Pakistan State Oil (PSO), and the PARCO Pearl Gas (Private) Limited (PPGL) would import 20,000 tons of additional LPG for winter and play a role in implementing the OGRA’s determined price of LPG and discourage over-charging and black marketing.
Appreciating the second LNG agreement contract signed with Qatar Gas during Pakistan Tahreek-e-Insaaf (PTI) government, he said it was beneficial for the country in the current LNG market but the previous government should also accept their offer for additional cargos.
He criticised the PTI government for not signing short- and long-term contracts at a time when the LNG prices nosedived to $2 to 3 per mmbtu during the Covid outbreak.
He alleged that the Cabinet Committee on Energy headed by Asad Umar took the decision that the PLL would not import additional LNG because of surplus electricity and K-Electric was also denied to install 1,000 MW plants from coal and decided that the electricity would be provided from the national grid.
He hinted that a price rationalisation plan was under consideration of the government to not allow any new connection well heads and fertiliser sector should also not allocate gas on $1.35 per mmbtu or 70 cents against government purchase of $17 per mmbtu. “It was unjust that domestic consumers will pay Rs25 per unit electricity from LNG-based power plants and the fertiliser sector will be subsidised at only Rs6.90 per unit,” he said.
Members committee raised questions regarding the progress being made by Energas Terminal (Pvt) Limited and Tabeer Energy (Pvt) Limited in the LNG business, the minister said that Energas Terminal (Pvt) Limited was serious and had joint venture with Qatar, however, Tabeer Energy was asking the government for sovereign guarantee or capacity charges but the government was not ready to take any responsibility.
OGRA Chairman Masroor Khan explained that both the companies were granted provisional licenses which were valid till 2023 and licences were for the construction and operation of pipelines, the last leg of LNG supply.
The chairman Committee expressed dissatisfaction over the management’s decision for awarding the contract against two bids received on Uch Gas compressor and said that such a clause was tailor-made to suit a particular bidder. He directed that tenders must be called again if the bidder numbers were less than three.
Copyright Business Recorder, 2022
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