Imported LNG is 65% More Expensive Than Local Gas: OGRA

The federal government’s plan to provide new domestic gas connections based on Liquefied Natural Gas (LNG) has become a contentious issue, with concerns over high costs and conflicting positions among ministries.

According to the Oil and Gas Regulatory Authority (OGRA), LNG is nearly 65% more expensive than local natural gas. A spokesperson for OGRA confirmed that the average price of local gas in Pakistan is Rs. 1,836.93 per MMBtu, while imported LNG costs an average of Rs. 3,034 per MMBtu.

OGRA officials stated that LNG is being imported under long-term agreements, with Pakistan bringing in around 10 cargoes per month.

This issue follows the Power Division’s earlier refusal to utilize costly imported LNG. Federal Minister for Power Owais Leghari recently made it clear that he would not accept expensive imported gas for power generation. He advised the Petroleum Division to reconsider existing gas agreements, stating that if deals for excess gas supplies had been made, renegotiation was the only permanent solution.

Leghari emphasized that altering the Economic Merit Order would be considered a grave mistake and said it would not be done under any circumstances.

The matter surfaced after Petroleum Minister Ali Pervez Malik expressed grievances in a television program, pointing out that the Power Division was no longer purchasing imported gas despite large quantities being procured for power plants. Leghari, in response, reiterated his stance of rejecting costly LNG supplies and urged a review of agreements by the Petroleum Division.