500 mmcfd of LNG to be imported

ISLAMABAD: The government decided to import 500 million cubic feet per day (mmcfd) liquefied natural gas (LNG) from Qatar, and a four-member Petroleum Ministry delegation would visit Qatar to strike a deal on LNG price.

This was stated by Minister Petroleum Dr Asim Hussain while talking to media persons after chairing a meeting of the special committee on gas crisis constituted by the Prime Minister. He said that Qatar has refused to provide LNG without sovereign guarantee, and the federal government would provide sovereign guarantee to Qatar for LNG import, as the country is facing serious gas shortage.

The Minister said that Pakistan is working on the Iran-Pakistan gas pipeline project and it would be completed as planned. He added that the committee would also hold its meeting on Wednesday as it had not reached any conclusion regarding gas load management plan.

The government has planned to bring 1.4 billion cubic feet per day (bcfd) gas in the shape of imported LNG and, in this connection, the Oil and Gas Regulatory Authority (Ogra) has already earmarked capacity allocation to three companies.

Oga on October 27 decided capacity allocation to Global Energy Infrastructure Pakistan (GEIP) and two other companies. Under the capacity allocations, GEIP is to import 500 million cubic per day (mmfcd) LNG.

Conditional licences have been issued to 'Pakistan Gasport', Engro Corporation, and Global Energy Infrastructure, while provisional licence has been issued to DSME ENR Limited.

Pakistan at present is facing acute gas shortage. As per government estimates, it has crossed 2 bcfd mark. The government is hard pressed to meet the rising demand in the power and gas sectors.

As per LNG Policy 2011, LNG supply to SSGC and SNGPL, the RLNG price will be an input for determining the weighted average cost of gas in Pakistan, determined by Ogra, for GoP specified consumers and industry. The LNG developer/LNG buyer will have the right to sell RLNG to end users directly based on a negotiated price.

The Minister had convened the first meeting of the special committee to formulate practical recommendations for gas load management for winter 2011-12, which was also attended by Defence Minister Ahmad Mukhtar, Naveed Qamar, Minister for Water and Power, Khursheed Ahmed Shah, Minister for Religious Affairs, Manzoor Ahmad Wattoo, Minister for Kashmir Affairs and Gilgit-Baltistan, senior officers of Cabinet Division, Finance Division, Industries Division, Water and Power Division and Petroleum Ministry.

Asim briefed the committee regarding existing gas supply/demand situation in the country. Managing Directors of SNGPL and SSGC provided detailed presentations to the committee via video conferencing. The committee was informed that at present there is a shortfall of approximately 1.1 bcfd as the demand of natural gas has increased 3 to 4 times in winters as compared to summers. During the first week of January 2012 SNGPL is facing total shortfall of 735 mmcfd, while as SSGC has a shortfall of 376 mmcfd.

Committee members deliberated upon the existing gas load management during the winter 2011-12 including gas supply to various sectors including the domestic, industrial, CNG, fertilizer, textile and the commercial sectors. The committee members unanimously agreed that domestic consumers should be provided natural gas on top priority.

The committee members agreed that workable solutions are to be forwarded to the Cabinet so that relief is provided to all stakeholders. The issue of gas shortage should not be politicised and the opposition should provide plausible suggestions to overcome the gas shortfall.