Pakistan is in the midst of an energy crisis due to which the country has had to import Liquefied Natural Gas (LNG). The move became necessary as gas supplies in the country were not enough to keep up with the demand.
Currently, imports of LNG are able to meet 25% of the gas supply shortages. A total of 2.5 billion cubic feet of LNG are supplied per day.
According to an official at the Ministry of Petroleum and Natural Resources, LNG is more economical than furnace oil. LNG has helped Pakistan in saving approximately $1.7 billion in bills.
An official at the Ministry of Petroleum and Natural Resources said:
Pakistan has imported 6.1 million tonnes of LNG through the country’s only LNG terminal, which is located at Port Qasim.
Operated by Engro, the terminal has handled 94 LNG cargo ships within 28 months and re-gasified approximately 284.7 bn cubic feet of gas into the national distribution network.
In order to fix the issues, the federal government might have to shift domestic consumers to the imported gas. At present, industries in Punjab are using imported gas whereas domestic consumers are provided with natural gas produced in Pakistan.
According to sources, there are two new terminal projects which are underway.
These projects have entered the implementation phase with a capacity of 1 bcfd and 600 million cubic feet per day (mmcfd) respectively. These are being developed by two different consortia that comprise Shell Pakistan, Qatar Petroleum, ExxonMobil, Total, Mitsubishi, Hoegh & Co, GEI, Engro Corporation and Fatima Group.
Engro has already set up Pakistan’s first LNG terminal at Port Qasim and has been handling LNG imports from Qatar since 2015. Qatar Petroleum is going to enter into partnership in setting up another LNG terminal at the port.
Possible Third Pipeline From Karachi-Lahore
To cope with dwindling energy supplies, public gas utilities are hoping to establish a third pipeline from Karachi to Lahore which will transmit about 1.2 bcfd of imported gas.
However, to build the third pipeline, the public gas utilities have asked the government to allow letting it borrow Rs175 billion in loans from commercial banks.
These utilities are already working on a pipeline augmentation project in a bid to enhance the capacity of their networks to carry 1.2 bcfd of LNG for energy-starved consumers.
According to an official, the Ministry of Petroleum and Natural Resources, as an alternative, is seeking allocation of Rs 175 billion for the utilities from the gas infrastructure development cess (GIDC) collection for building the Karachi-Lahore pipeline.