Pakistan has awarded a 10-year license to an independent energy and commodity trading company, Trafigura Pakistan, for the purchase and sale of natural gas/re-gasified liquefied natural gas (RLNG) in the country.
This is the first license to be awarded in the private sector for LNG import. It aims to improve the availability of gas to different industries and also optimal utilization of the LNG terminal. This development can pave the way for the private sector to invest in this segment.
According to a senior official of the Oil and Gas Regulatory Authority (OGRA), the operations of the Geneva-headquartered entity, Trafigura, will give a boost to the fledgling state-run Sui Southern Gas Company (SSGC). That is because Trafigura will pay annual gas transportation charges to the SSGC in billions of rupees.
Apart from payment of transportation charges to SSGC, the company will also pay an annual fee of 0.25 percent of its annual turnover from the sale of gas pertaining to the most recent financial year to the regulator.
The price of RLNG will be set in line with the policy guidelines issued by the government.
The government has also decided to increase the LNG import by 400 mmcfd by December 2019. The increased import will also improve the financial stability of the public gas companies by receiving more charges for gas transportation.
Out of the proposed 400 mmcfd addition to LNG import, the government has floated a tender for 200 mmcfd for which Trafigura is also a contestant. The bid will be opened and awarded in a few days.
Presently, over 1,100 mmfcd LNG is being re-gasified at two LNG terminals. Out of that, the power sector is receiving 790 mmcfd and the fertilizer industry is getting 180 mmcfd. The second terminal has the capacity to handle 790 mmcfd LNG while the government has dedicated a capacity of 600 mmcfd.