Italy is keen to supply Liquefied Natural Gas (LNG) to Pakistan for which negotiations are under way between the relevant officials, Federal Minister for Petroleum Shahid Khaqan Abbasi said. Talking to Business Recorder, here on Monday after chairing a high-level meeting with Italian delegation led by Italian Minister for Economic Development Ivan Scalfarotto, Abbasi said that Pakistan is also in talks with a number of other suppliers for LNG deals.
He said that the country has planned to take LNG supply within the next few years from current volume of 400 million cubic feet per day (MMCFD) to 2.2 billion cubic feet per day (BCFD). The government is also holding talks with Malaysian LNG supplier Petronas, the second largest global LNG supplier, Russian Gazprom as well as Nigerian and others.
The minister said that two sides discussed matters related to energy issues from Italian investment in oil/gas sector of the country to LNG supply and others.
He said Italian oil/gas exploration and production (E&P) company ENI is actively involved in tapping the natural resources and "we discussed to further enhance this co-operation with Italy." Pakistan has been facing severe gas shortage since past many years and to cope with the energy crisis the country has stepped up effort to attract foreign investment, especially in the oil, gas and LNG sectors.
Pakistan is currently buying LNG from Qatar under the long-term deal signed earlier this year. Also, it is buying the fuel from Gunvor that has received a contract for providing 60 ships. Total supply stands at 300mmcfd from Qatar and 100mmcfd from Gunvor. The price for both supply sources was 13.37 per cent of the Brent oil rate. Pakistan GasPort Limited has started constructing the country's second LNG terminal, which is likely to be completed on June 30, 2017 with a capacity to handle 600mmcfd of imported LNG.
Fasiah Iqbal of Pakistan GasPort limited told this correspondent that the government has given the company 11 months for completion of the terminal, but the company is committed to completing it within the shortest possible time. At present 9 ships are working in Port Qasim Karachi on the project. The state-owned Pakistan LNG Limited (PLL) is seeking the supply of 240 cargoes of LNG for which it has issued two separate tenders.
According to the company's tender documents, first tender is inviting bids from LNG suppliers for the delivery of 60 cargoes through a master sale and purchase agreement over a period of five years. In a second tender, PLL is looking for the supply of 180 cargoes delivered over a period of 15 years.
Cargoes, under both tenders, are to be delivered on a DES (delivered ex-ship) basis to the LNG terminal operated by Pakistan GasPort Consortium at Port Qasim, the company said. The start of the deliveries is set for July 2017, with a nominal cargo capacity set at 3bcfd, according to the documents. Major portion of imported LNG is being supplied to gas-based power plants that are either sitting idle due to non-availability of gas or burning expensive form of fuel to produce expensive electricity.