Pakistan intends to allow liquefied natural gas (LNG) imports to balance out the diminishing domestic output and the rising demand, reported Bloomberg.
Talking to Bloomberg, Federal Minister for Energy, Hammad Azhar revealed that the government had tabled a bill in the Parliament, seeking to broaden access to additional gas imports for local consumers who accounted for almost 70 percent of the winter demand.
The Minister explained, “The current supplies are such that we can barely even meet our current customers. Gas is running low in Pakistan and we have to supplement it.” He noted that domestic gas output had dropped by nearly five times in the last couple of years. He said a law allowing LNGÂ to be delivered to local customers was expected to come to the surface soon.
He remarked that as LNG was more expensive than domestic gas, a thorough debate over costs would be essential, and any hikes would not be “drastic”.
It is pertinent to note that Pakistan has barely withstood the impetus of Europe’s ongoing energy crisis, despite LNG traders including Eni SpA and Gunvor Group Ltd. having missed cargo deliveries to the South Asian country not long ago. According to the Energy Minister, another merchant is anticipated to miss delivery to Pakistan this month.
Keeping in view the issues faced as a result of relying on foreign supply, Azhar said the government was considering transforming a section of a state-run liquefied petroleum gas (LPG) terminal into an import facility.
While Pakistan typically imports LNG via two terminals, the Energy Minister forecasts that the proposed third facility will be operationalized next year.
Hammad Azhar said the government was considering measures to persuade enterprises to permanently switch away from gas-fired generators, having already granted subsidies/incentives to use electricity instead of gas for heating. The question is whether or not the price-conscious LNG importers would be willing to pay a premium for the fuel, especially after international prices hit new highs this winter.
