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                        <title>The Express Tribune</title>
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                        <description>The Express Tribune keeps you up to date with all the latest happenings from Pakistan and across the world!</description>
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			<title>Judge orders Biden administration to resume permits for gas exports</title>
			<link>https://tribune.com.pk/story/2475850/judge-orders-biden-administration-to-resume-permits-for-gas-exports</link>
			<comments>https://tribune.com.pk/story/2475850/judge-orders-biden-administration-to-resume-permits-for-gas-exports#comments</comments>
			<pubDate>Tue, 02 Jul 24 05:51:05 +0500</pubDate>
			<dc:creator>
				<![CDATA[REUTERS]]>
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			<category><![CDATA[World]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2475850</guid>
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				<![CDATA[Judge stated US Dept of Energy's freeze on approvals of LNG exports was &quot;completely without reason&quot;]]>
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				<![CDATA[&nbsp;federal judge on Monday dealt President Joe Biden&#39;s climate agenda a setback by blocking the Democrat&#39;s administration from continuing to pause the approval of applications to export liquefied natural gas (LNG).

US&nbsp;District Judge James Cain in Lake Charles, Louisiana, sided with 16 Republican-led states in holding that the US&nbsp;Department of Energy&#39;s freeze on approvals of LNG exports was &quot;completely without reason or logic.&quot;

Cain, an appointee of Republican former President Donald Trump, said the states were likely to succeed in showing the pause contravened the Natural Gas Act and was arbitrary, capricious, and unconstitutional.

Cain said the department&#39;s actions were &quot;above and beyond its scope of authority.&quot; He said he had &quot;reviewed the voluminous studies attached as exhibits, all of which boast of both the economic and environmental benefits of exporting natural gas.&quot;

An Energy Department spokesperson said it disagreed with the ruling and is evaluating next steps.

The Biden administration announced the pause in January, which it said&nbsp;would allow, opens new tab&nbsp;officials to review the process for analyzing economic and environmental impacts of projects seeking approval to&nbsp;export LNG&nbsp;to Europe and Asia where the fuel is in high demand.

The January move was cheered by climate activists, an important part of Biden&#39;s base, and could have delayed decisions on new plants until after the Nov. 5 presidential election, when Biden will face off against Trump.

Republican-led states including Texas, Louisiana and Florida,&nbsp;sued in March, arguing the policy would harm the economy and undermine efforts to supply foreign allies in Europe with steady supplies of LNG as the region seeks to wean itself off piped gas from Russia.

The states argued that the pause on new approvals for LNG exports oversteps the DOE&#39;s authority under the Natural Gas Act, which they said requires the agency to affirmatively show projects are inconsistent with the public interest before denying applications.

The states also argued the ban jeopardizes billions of dollars in investments planned to build export facilities.]]>
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			<title>Pakistan unlikely to purchase spot LNG this summer despite intense heat</title>
			<link>https://tribune.com.pk/story/2471298/pakistan-unlikely-to-purchase-spot-lng-this-summer-despite-intense-heat</link>
			<comments>https://tribune.com.pk/story/2471298/pakistan-unlikely-to-purchase-spot-lng-this-summer-despite-intense-heat#comments</comments>
			<pubDate>Wed, 12 Jun 24 18:31:10 +0500</pubDate>
			<dc:creator>
				<![CDATA[Reuters]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2471298</guid>
			<description>
				<![CDATA[Petroleum Minister Musadik Malik says Pakistan will not buy spot LNG until November due to oversupply and high prices]]>
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				<![CDATA[Pakistan is unlikely to buy liquefied natural gas (LNG) cargoes on the spot market until at least the beginning of winter in November due to oversupply and high prices, Federal Minister of Petroleum Musadik Masood Malik told Reuters.

Extreme temperatures across Asia have pushed countries to seek more cargoes of LNG to address higher power demand, driving spot prices to their highest since mid-December. Asia spot LNG last traded at $12.00 per million British thermal units (mmBtu) on Friday.

However, LNG demand in the second largest south Asian LNG buyer was &quot;subordinate to supplies,&quot; the minister told Reuters, despite heatwaves baking the country of 300 million people with temperatures surging to a near-record.

&quot;The question of getting more LNG when we can&#39;t sell the amount of LNG that we already are obtaining from our long-term contracts, it does not apply,&quot; the minister told Reuters in an interview.

Annual power use in Pakistan, which gets over a third of its electricity from natural gas, is expected to fall consecutively for the first time in 16 years, due to higher tariffs curbing household consumption.

Poor and middle class households are still feeling the impact of last year&rsquo;s International Monetary Fund (IMF) bailout, which contributed to higher retail prices. A series of power tariff hikes over 12 months was a key part of the IMF programme which ended in April.

Industrial demand has also remained tepid due to a cloudy economic outlook.

Read also: Azerbaijan seeks to resume LNG supply

Pakistan, which last bought a spot LNG cargo in late 2023, cancelled its spot LNG tender for delivery in January. Malik attributed the cancellation to oversupply, adding that there were &quot;not a lot of customers&quot; at current LNG spot prices.

Malik said Pakistan was keen to adopt more renewable energy to cut its import bill and exposure to geopolitical shocks. The country suffered widespread power outages due to its inability to buy expensive LNG after prices surged due to Russia&#39;s invasion of Ukraine.

&quot;Any country that is importing $15-18 billion of fuel, how can it be sustainable when the total exports are south of $30 billion? So we have to move away from the imported elements such as LNG,&quot; he said.

The country was also trying to access less expensive natural gas by building a pipeline with Iran, but was wary of sanctions, he said.

&quot;We basically are trying to work out the solution whereby we can have access to less expensive gas, but in a manner which does not invoke any sanctions on Pakistan. It all depends on legal interpretations,&quot; he said.

&quot;From our perspective, we don&#39;t want to get into litigation and we don&#39;t want to get sanctioned.&quot;]]>
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			<title>Govt to add storage facilities to Gas Stream project</title>
			<link>https://tribune.com.pk/story/2468951/govt-to-add-storage-facilities-to-gas-stream-project</link>
			<comments>https://tribune.com.pk/story/2468951/govt-to-add-storage-facilities-to-gas-stream-project#comments</comments>
			<pubDate>Thu, 30 May 24 04:49:29 +0500</pubDate>
			<dc:creator>
				<![CDATA[Zafar Bhutta]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2468951</guid>
			<description>
				<![CDATA[Several changes in project’s structure have delayed its implementation]]>
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				<![CDATA[As several years have passed without any commercial development on the Pakistan Gas Stream project, Pakistan has planned to amend the structure by integrating gas storage into the scheme. Pakistan and Russia had floated the project in 2015 after Islamabad started work on liquefied natural gas (LNG) supplies with the cooperation of Qatar.

However, US sanctions on Russian entities blocked progress on the Gas Stream project. Pakistan has changed the structure of the project several times and also invited Chinese and United Arab Emirates (UAE) investors to pour investment.

However, nothing has worked out so far and the two countries have not been able to finalize a commercial deal. Now, the Petroleum Division has tabled an idea for integrating gas storage into the Pakistan Gas Stream project. Earlier, the Pakistan Tehreek-e-Insaf (PTI) government had accused the Pakistan Muslim League-Nawaz (PML-N) administration of building LNG terminals while ignoring the development of gas storage facilities.

According to the original plan, Russian companies are to build a pipeline from Karachi to Lahore to pump LNG. However, during the previous Pakistan Democratic Movement (PDM) government, it was decided to shift the starting point for LNG supply from Karachi to Gwadar, which was not welcomed by Russia.

In that regard, Pakistani officials had to face an embarrassing situation when they took up the matter before the Russians during talks in Moscow last year. Pakistan has changed the structure of the project almost six times, which has upset the Russian side. Initially, Russia had nominated RT Global for executing the project whereas Pakistan designated the state-owned Inter State Gas Systems (ISGS).

However, soon after the Russian government&rsquo;s nomination in early 2016, the US slapped sanctions on RT Global, leaving the project &ndash; then called the North-South Gas Pipeline &ndash; in jeopardy. Since then, Pakistan and Russia have changed the structure several times but they could not be able to find a way out. In July 2021, the two sides decided that Pakistan&rsquo;s state-owned gas companies would hold 74% of shares in the project whereas Russian firms would own 26%.

This meant that Pakistani companies would have to invest 74% of the funding whereas Russian firms would provide the rest. Pakistan and Russia signed an amended Intergovernmental Agreement (IGA) to start construction work on the pipeline during the PTI&rsquo;s tenure in May 2021. Under a revised deal, it was agreed that a special purpose vehicle (SPV) would be set up for the Pakistan Gas Stream project within 60 days of the signing of the implementation agreement.

After the PTI was ousted, the Pakistani side under the PML-N-led coalition government again proposed to revise the structure of the gas pipeline. Then state minister for petroleum, Musadik Malik, proposed to the Russians that the project should be completed on a build-operate-transfer (BOT) basis.

This was the initial model conceived at the beginning of the project a decade ago. Under this model, the entire investment had to be made by the Russians and the project would be transferred to Pakistan after 25 years. Sources said the Russians were so dismayed by the changes that they refused to talk on the subject during recent talks in Moscow.

They said the pipeline had been delayed because of the involvement of several stakeholders, adding that some businessmen working for Russian companies in Pakistan spoiled it. Secondly, the shareholders in Pakistani state gas utilities wanted local companies to execute the project.

Gas utilities receive a guaranteed rate of return on assets. Therefore, the construction of an additional asset in the form of the pipeline will give a boost to their revenues. Apart from that, the textile and fertilizer barons are also allegedly responsible for the delay in the project.

These two sectors receive subsidies of billions of rupees but they have not yet deposited over Rs500 billion on account of gas infrastructure development cess (GIDC). When the Supreme Court ordered them to pay GIDC to the government in installments for completion of the gas pipeline project, they obtained stay orders from courts.]]>
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			<title>Pakistani conglomerate Engro looks to go global, its main investor says</title>
			<link>https://tribune.com.pk/story/2465731/pakistani-conglomerate-engro-looks-to-go-global-its-main-investor-says</link>
			<comments>https://tribune.com.pk/story/2465731/pakistani-conglomerate-engro-looks-to-go-global-its-main-investor-says#comments</comments>
			<pubDate>Wed, 08 May 24 16:33:04 +0500</pubDate>
			<dc:creator>
				<![CDATA[Reuters]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2465731</guid>
			<description>
				<![CDATA[Expansion plans include looking at telecoms infrastructure in Middle East, North Africa, and Central Asia]]>
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				<![CDATA[Pakistan&rsquo;s largest conglomerate, Engro Corp, is looking to expand into new markets, including the Middle East, Central Asia and Africa, the chemicals-to-energy company&rsquo;s largest investor said on Tuesday.

Speaking to Reuters in a rare interview, Samad Dawood, Vice Chairman of Dawood Hercules Corp, which owns 40% of Engro Corp, said the company was also considering global liquefied natural gas (LNG) opportunities as well as hydrogen energy.

The expansion plans include looking at telecoms infrastructure in the Middle East, North Africa, and Central Asia, while it is looking at Africa to expand its fertiliser businesses, he said.

Engro Corp has a market capitalisation of Rs193 billion ($694 million) on the Pakistan Stock Exchange and assets of Rs802 billion ($2.9 billion), according to public data.

The group has businesses across multiple sectors in Pakistan, including energy, fertiliser, telecommunications and consumer goods.

It owns 56% of Pakistan&rsquo;s first LNG terminal, Engro Elengy Terminal Pakistan, which was set up in the southern city of Karachi in 2015. Dutch energy logistics giant Royal Vopak owns the remaining 44%.

The terminal fulfils 15% of Pakistan&rsquo;s natural gas demand.

Read also:&nbsp;Engro Energy sells thermal assets

Dawood said Engro will continue to invest in the energy sector despite having sold its coal-based assets, and was exploring new avenues for sustainable energy production.

He said the company was talking to technology providers in the hydrogen energy sector to figure out how to use ammonia as an energy transition solution.

Dawood added that Pakistan was far from being energy-secure and there were plenty of opportunities to invest further in the power sector.

Pakistan has moved toward reliance on LNG after its own domestic gas supplies dwindled fast as consumption in the industrial and residential sectors increased.

&lsquo;Dreamer&rsquo;

Dawood said the global push was inspired by his late elder brother Shahzada, who perished last year in the ill-fated Titan&rsquo;s voyage to explore the Titanic wreckage &ndash; an accident that made global headlines when the deep-sea submersible imploded and killed all five people on board.

&ldquo;He (Shahzada) was much more of a dreamer and pushing us to become more international and building that curiosity and engaging with the outside world,&rdquo; Dawood said.

The Dawood family also faced a protracted legal ordeal in Pakistan where the company was accused of getting illegal favours from the government.

The case, which lasted years, finally ended last week with the country&rsquo;s accountability watchdog dropping the case entirely. Dawood says the matter hurt the family deeply and even impacted their businesses and potential investors.

Read:&nbsp;Engro, Dawood Hercules to restructure shareholding

The company&rsquo;s plans to push ahead are taking shape, Dawood said. On Monday, the boards of Engro and Dawood Hercules approved in principle a restructuring plan to allow them more capital flexibility.

Dawood said the restructuring will allow for participation in &ldquo;opportunities that the entire economy provides,&rdquo; adding that the boards wanted the flow of capital to be completely seamless between the two organisations.

He said Engro would be able to expand its investment mandate to include exploring opportunities created by multinational corporations divesting from Pakistan&#39;s troubled markets.]]>
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			<title>NAB withdraws LNG reference against Abbasi</title>
			<link>https://tribune.com.pk/story/2464587/nab-withdraws-lng-reference-against-abbasi</link>
			<comments>https://tribune.com.pk/story/2464587/nab-withdraws-lng-reference-against-abbasi#comments</comments>
			<pubDate>Tue, 30 Apr 24 07:20:13 +0500</pubDate>
			<dc:creator>
				<![CDATA[Our Correspondent]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2464587</guid>
			<description>
				<![CDATA[Former MD PSO petitions NAB, argues in court that this is a politically motivated case unrelated to corruption]]>
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				<![CDATA[The National Accountability Bureau (NAB) withdrew on Tuesday the liquified natural gas (LNG) reference against former premier Shahid Khaqan Abbasi.

The decision came during the hearing of the LNG reference presided by Judge Nasir Javed Rana of the accountability court.

During the hearing, NAB withdrew its reference against the former premier and all other accused in the case, including ex-finance minister Miftah Ismail, Sheikh Imran ul Haque, Engro Chairman Hussain Dawood and Board member Abdul Samad Dawood.

Read NAB approves references against Shehbaz Sharif, Shahid Khaqan, former envoy

Deputy Prosecutor Azhar Maqbool from NAB and Shahid Khaqan Abbasi&#39;s legal representatives were both present in court.

According to the sources, the former MD PSO petitioned NAB to reconsider the validity of the reference. Following the request, the accountability watchdog decided to withdraw the reference on merit.

Reacting to the court&#39;s ruling, Barrister Qasim Nawaz Abbasi, representing Sheikh Imranul Haq, expressed his satisfaction with the decision. However, he added that throughout this ordeal, the accused endured not only the trial but also considerable hardships.

Speaking to the Express News, he also noted that numerous accused individuals were incarcerated as part of this case. &ldquo;It was argued in court that this is a politically motivated case unrelated to corruption.&rdquo;

&ldquo;To prevent similar occurrences in the future, pursuing charges should be avoided until concrete evidence of corruption is presented,&rdquo; he stressed.

&nbsp;]]>
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			<title>E&amp;P firms seek Rs75b tariff subsidy</title>
			<link>https://tribune.com.pk/story/2463210/ep-firms-seek-rs75b-tariff-subsidy</link>
			<comments>https://tribune.com.pk/story/2463210/ep-firms-seek-rs75b-tariff-subsidy#comments</comments>
			<pubDate>Fri, 19 Apr 24 22:44:07 +0500</pubDate>
			<dc:creator>
				<![CDATA[Zafar Bhutta]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2463210</guid>
			<description>
				<![CDATA[Argue preference being given to LNG imports over ramping up local production]]>
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				<![CDATA[Petroleum exploration and production (E&amp;P) companies have informed the federal government that the payables of gas utilities to foreign firms have mounted to $600 million and called for allocating a tariff differential subsidy of Rs75 billion to avert collapse of Pakistan&rsquo;s upstream petroleum sector.

In a letter written to the minister of petroleum, Pakistan Petroleum Exploration and Production Companies Association (PPEPCA) claimed that preference was being given to liquefied natural gas (LNG) imports instead of ramping up efforts for gas exploration in the country.

It argued that delayed payments were becoming a significant barrier to the ability of upstream companies to pump investment into their assets. &ldquo;This issue has resulted in a reduction of 300 mmcfd (million cubic feet per day) of gas due to low drilling activities.&rdquo;

The association called for taking different measures to stave off the collapse of Pakistan&rsquo;s upstream petroleum sector. It sought a budgetary grant or tariff differential subsidy of at least Rs75 billion for Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipelines Limited (SNGPL) for partially bridging the accumulated revenue shortfall.

The subsidy will facilitate them in paying the upstream companies, which will, in turn, be able to meet their operating expenditures and carry out planned exploration and development work for sustaining and enhancing oil and gas production in the country. It asked the government to give directives to the State Bank of Pakistan (SBP) for allocating foreign exchange for payments to foreign E&amp;P companies in an equitable manner.

It also underscored the need for initiating work on underground gas storage facilities to avoid the curtailment of indigenous gas supplies.

In the letter, the association of E&amp;P companies drew attention towards a critical situation unfolding in the upstream oil and gas sector.

&ldquo;Our industry is confronting a complex array of challenges that require urgent action. Foremost among these is the alarming amount of outstanding receivables, which currently stand at a staggering Rs1,500 billion, of which over $600 million is payable to foreign companies.&rdquo; It pointed out that companies were witnessing a marked decline in domestic oil and gas production, with the shortfall being balanced by costly energy imports, especially LNG, resulting in growing energy shortages.

The issue of mounting receivables was not only affecting the financial health of companies within the industry but was also jeopardising the broader energy security and foreign investment in Pakistan, the association cautioned.

It is undermining the confidence of investors and creditors, hindering the necessary capital flow and technology for exploration and developmental activities.

This is evidenced from the fact that no new international upstream company, according to PPEPCA, has invested in any block or opportunity on offer over the past few years, while a number of international E&amp;P companies have exited the country.

&ldquo;Our sector currently produces 3,200 mmcfd of natural gas along with 70,000 barrels per day of indigenous oil. This output represents 35% of the country&rsquo;s primary energy supply, highlighting the sector&rsquo;s crucial role in meeting energy needs,&rdquo; it said, adding that such a vital sector had been crippled by default on the part of government-backed gas utilities.

It warned that the severe cash flow crisis was pushing companies to drastically cut exploration and development activities.

Till February 2024, out of the planned exploration of 23 wells during the year, only nine were drilled. At present, only 19 out of the available 42 rigs are operational in the country and there is a substantial reduction in seismic activities.

Even development wells are being put on hold as companies are reluctant to bring additional gas volumes to the market. This loss of activity has curtailed around 300 mmcfd of gas production.

In addition, the preference for imported LNG over domestic gas is causing the choking of production at mature wells and fields, some of which may not be revived.

&ldquo;This has fostered a situation where investment to find new oil and gas fields and maintain production at existing fields is drying up. As a result, the gas production is rapidly declining and replacing it with expensive LNG will have significant ramifications for our economy and the political landscape,&rdquo; the association said in the letter.

It claimed that payment default was consistently growing, despite the increase in consumer gas prices twice in the last fiscal year, effective from November 1, 2023 and February 1, 2024.

This situation calls for the government to immediately provide funds to the gas utilities to improve their liquidity position. Also, it must be noted that payments to foreign oil and gas companies are backed by sovereign guarantees and any non-payment can be considered a sovereign default.

In order to manage the crisis, the association requested the government to take necessary steps without further delay. Otherwise, its member companies may be forced to reduce or suspend production, leading to a massive shortage of gas.

Published in The Express Tribune, April 20th, 2024.

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&nbsp;]]>
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			<title>Energy supply chain under threat</title>
			<link>https://tribune.com.pk/story/2460641/energy-supply-chain-under-threat</link>
			<comments>https://tribune.com.pk/story/2460641/energy-supply-chain-under-threat#comments</comments>
			<pubDate>Tue, 26 Mar 24 21:04:50 +0500</pubDate>
			<dc:creator>
				<![CDATA[Our Correspondent]]>
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			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2460641</guid>
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				<![CDATA[PSO seeks payment of outstanding dues of Rs550 billion for LNG supply]]>
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				<![CDATA[Pakistan State Oil (PSO) has warned that the country&rsquo;s entire energy supply chain may get disrupted as circular debt is uncontrollably rising in sales of liquefied natural gas (LNG).

In a letter written to the managing director of Sui Northern Gas Pipelines Limited (SNGPL), oil marketing giant PSO said that outstanding dues against the sale of LNG to the public gas utility had gone up to alarming levels, which could threaten the smooth functioning of the entire energy chain.

&ldquo;This is in continuation to the numerous letters and correspondences relating to outstanding payment against supply of LNG; it is of great concern that payments against LNG supplies from SNGPL have been alarmingly low since the start of fiscal year 2024 and resulted in a net increase of Rs49 billion in PSO&rsquo;s receivables,&rdquo; the PSO management said.

At present, PSO&rsquo;s total receivables from SNGPL stand at Rs550 billion. &ldquo;We would like to reiterate that PSO&rsquo;s cash flow situation is deteriorating rapidly due to continued default in payments by SNGPL and PSO is incurring huge financial charges on financing the growing receivables,&rdquo; the oil marketing company said.

&ldquo;Owing to this situation, PSO is facing a serious liquidity crunch which may lead to the disruption of the country&rsquo;s energy supply chain.&rdquo;

The management of PSO requested the gas utility to immediately clear the entire outstanding dues of Rs550 billion for LNG supplies, by employing all the available options, in order to ensure uninterrupted energy supply in the country.

Read&nbsp;PSO keen on OGDCL, Mari Petroleum shares

PSO is a key importer of LNG from Qatar and supplies it to SNGPL to meet the requirement of varying consumers.

During the previous winter, SNGPL diverted LNG to domestic consumers following directives from the federal government to overcome energy crisis, mainly in Punjab, which had very low local gas production.

The cost of diverting LNG to domestic consumers has been estimated at $1 billion to address the shortages anticipated in fiscal year 2024-25.

State-owned gas entities are already reeling from the circular debt that has piled up to Rs710 billion, primarily due to LNG supply.

Pakistan LNG Limited (PLL) shoulders a circular debt of Rs142 billion, while PSO grapples with a debt burden of Rs568 billion, all stemming from the supply of re-gasified LNG to state-owned gas utilities.

It was revealed by the key stakeholders recently. The All Pakistan Textile Mills Association (Aptma) North Zone, at a public hearing conducted in Lahore, asserted that the diversion of RLNG to domestic consumers was feared to cost a staggering $1 billion in financial year 2024-25, accounting for 209 million cubic feet of gas per day (mmcfd).

SNGPL has projected diversion of 80,155 British thermal units of RLNG to its consumers in 2024-25 at a cost of Rs297,913 million, equivalent to $1 billion, which has been approved by the Economic Coordination Committee (ECC) and ratified by the federal cabinet.

The circular debt in RLNG chain has been on the rise because of prolonged delay in application of the weighted average cost of gas.

The Pakistan Tehreek-e-Insaf (PTI) government had got approved the weighted average cost of gas bill from parliament but it was challenged in Sindh High Court.

The Oil and Gas Regulatory Authority (Ogra) has applied the weighted average cost partially, but it has not been fully implemented. Therefore, the amount of $1 billion would either be recovered from consumers or it would be added to the circular debt.

Meanwhile, SNGPL is seeking a massive increase in gas prices, effective from July 1, 2024, to meet the company&rsquo;s revenue requirement.

Published in The Express Tribune, March 27th, 2024.

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			<title>Gas crisis looms as $1bn diverted to domestic sector</title>
			<link>https://tribune.com.pk/story/2460385/gas-crisis-looms-as-1bn-diverted-to-domestic-sector</link>
			<comments>https://tribune.com.pk/story/2460385/gas-crisis-looms-as-1bn-diverted-to-domestic-sector#comments</comments>
			<pubDate>Sun, 24 Mar 24 17:24:10 +0500</pubDate>
			<dc:creator>
				<![CDATA[Zafar Bhutta]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2460385</guid>
			<description>
				<![CDATA[Expensive RLNG to be diverted to the domestic sector in a bid to alleviate the gas crisis]]>
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				<![CDATA[The gas sector braces for another blow as approximately $1 billion is earmarked for diverting expensive RLNG to the domestic sector in a bid to alleviate the gas crisis anticipated in the fiscal year 2024-25.

State-owned oil and gas entities are already staggering under the weight of a circular debt amounting to Rs710 billion, primarily due to the supply of RLNG.

Pakistan LNG Limited (PLL) shoulders a circular debt of Rs142 billion, while Pakistan State Oil (PSO) grapples with Rs568 billion, all stemming from the supply of RLNG to state-owned gas utilities.

The revelation comes from key stakeholders, the All Pakistan Textile Mills Association North region, who assert that the diversion of RLNG to domestic consumers is poised to incur a staggering cost of $1 billion in FY 24-25, accounting for 209 MMCFD (million cubic feet per day).

The gas utility SNGPL had projected 80,155 BBTU RLNG diversion to system gas consumers in FY 2024-25 at a cost of Rs297,913 million which amounted to $1 billion, approved by ECC and ratified by the federal cabinet.

The circular debt in RLNG was going on the rise due to the non-implementation of the weighted average cost of gas.

PTI government had approved a bill of weighted average cost of gas from parliament but it was challenged in the Sindh High Court.

The oil and gas regulatory authority (Ogra) has implemented the weighted average cost of gas partially but it was not fully implemented. Therefore, an amount of one billion dollars would either be recovered from the consumers or it will be parked in circular debt.

SNGPL is seeking a massive increase in gas prices to be implemented from July 1, 2024. The Ogra will conduct a public hearing on Monday to consider an increase in gas prices.

Read also: APTMA wants gas market deregulation

A body of textile millers-APTMA in its comments submitted to Ogra said that gas prices have been hiked again to Rs2,750/MMBtu&mdash;an increase of 223% since January 2023.

The petitioner has projected an aggregate average prescribed price (Rs/MMBtu) of Rs4,446.89, with the price for all consumers at Rs4,501.33, effective from July 1, 2024.

It said that grid electricity tariffs are approximately 17.5 cents/kWh and are increasing with no end in sight.

As such, there is no financially viable source of energy for firms to manufacture with and be able to compete in international markets,&rdquo; textile millers said adding that tariffs in Pakistan stand as some of the highest in the region.

However, these elevated tariffs pose significant risks to national security by impeding industrial growth, reducing competitiveness, and increasing dependence on imports and aid,&rdquo; textile millers said.

Particularly for manufacturing, which heavily relies on energy, soaring operational costs due to high tariffs result in increased consumer prices and trigger de-industrialisation.

Sectors like textiles face mounting challenges, with elevated electricity and gas prices affecting both production costs and consumer prices. The practice of cross-subsidising natural gas and electricity for the residential sector at the expense of industries exacerbates the problem.

To maintain optimal tariffs, the federal government must peg industrial tariffs to OGRA&rsquo;s prescribed price, thereby setting a benchmark and insulating tariffs from inefficiencies in the power sector,&rdquo; textile millers added.

LPG Air Mix, priced at around $33 per MMBtu, is sold as natural gas (SNG) at PNG domestic consumer prices, resulting in a significant shortfall that industrial consumers cross-subsidise.

Read: Gas becomes a rarity in Ramazan

However, the high initial investment for infrastructure may not be recoverable through sales, and ongoing depreciation and maintenance costs further burden industrial consumers.

Domestic sector consumption in both Sui Southern Gas Company Ltd. (SNGPL) network increased by more than 4%, from 310 BCF in FY 2022 to 323 BCF in FY 2023 with the highest UFG rates and cost of service.

The petition mentions an anticipated further decline of 12% in SNGPL&#39;s indigenous gas production with increased sales to the domestic sector.

Only 28% of the country&#39;s population is served by gas, both indigenous and imported, with a diversion of over 200 MMCFD of RLNG carrying a price tag of $1 billion.

Gas appliance efficiency in the domestic sector of Pakistan is one of the lowest globally, wasting scarce resources for decades at $1-3 per MMBtu.

Captive at $11.7 remains a key issue, adding economic value to gas and boosting exports,&rdquo; Millers said and pointed out that the gas sector faces numerous challenges, including high unaccounted-for gas (UFG) rates, inadequate infrastructure, and inefficient gas appliance usage in the domestic sector.

Market deregulation can foster competition and innovation, while administrative pricing set by the federal government should be revised to prevent rent-seeking behaviour and ensure efficient resource allocation,&rdquo; textile millers said.

Addressing Pakistan&#39;s energy tariff challenges requires a multifaceted approach, including tariff rationalisation, promotion of alternative energy sources, and reforms in the gas sector. By implementing these measures, Pakistan can achieve a more sustainable and efficient energy ecosystem while fostering economic growth and competitiveness,&rdquo; APTMA added.]]>
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			<title>LNG prices raised up to 2.6% for March</title>
			<link>https://tribune.com.pk/story/2459999/lng-prices-raised-up-to-26-for-march</link>
			<comments>https://tribune.com.pk/story/2459999/lng-prices-raised-up-to-26-for-march#comments</comments>
			<pubDate>Wed, 20 Mar 24 21:32:17 +0500</pubDate>
			<dc:creator>
				<![CDATA[Our Correspondent]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2459999</guid>
			<description>
				<![CDATA[SNGPL price has been raised by 2.58% per mmBtu on a month-on-month basis for the end-consumers on its network]]>
			</description>
			<content:encoded>
				<![CDATA[The Oil and Gas Regulatory Authority on Wednesday increased the tariff on imported liquefied natural gas up to 2.6% per million British thermal units for the two public gas utilities, namely Sui Northern Gas Pipelines Limited and Sui Southern Gas Company with retrospective effect from March 1, 2024.

In a statement, the regulator said that the increase in monthly re-gasified LNG rates was due to the rise in its cost of supply. Ogra has notified both transmission and distribution prices for the two gas companies. The SNGPL price has been raised by 2.58% per mmBtu on a month-on-month basis for the end-consumers on its network. Ogra has fixed the price at $12.8142 per mmBtu for supplies in March. The price was marginally higher by $0.3220 per mmBtu from February 2024, when the rate was $12.4922.

Similarly, the RLNG price for SSGC has been raised by 0.76% per mmBtu. Now, end-consumers will pay $13.0563 per mmBtu for March, higher by $0.0979 than the price of $12.9584 per mmBtu in the previous month.

Published in The Express Tribune, March 21st, 2024.

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&nbsp;]]>
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			<title>Gas becomes a rarity in Ramazan</title>
			<link>https://tribune.com.pk/story/2459591/gas-becomes-a-rarity-in-ramazan</link>
			<comments>https://tribune.com.pk/story/2459591/gas-becomes-a-rarity-in-ramazan#comments</comments>
			<pubDate>Sun, 17 Mar 24 04:45:16 +0500</pubDate>
			<dc:creator>
				<![CDATA[Wisal Yousafzai]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2459591</guid>
			<description>
				<![CDATA[Residents of all major cities have to rely on exorbitantly priced LPG cylinders given the load shedding]]>
			</description>
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				<![CDATA[Despite provincial governments making promises of uninterrupted gas supply to household users during the month of Ramazan, gas has become a rarity in the Holy Month, which has led to residents relying on liquefied petroleum gas (LPG) cylinders; resultantly, prices for LPG cylinders have increased.

Tired of the government&rsquo;s false promises, the populace of the country has started relying on LPG gas cylinders to cook meals for sehri and iftar. This increase in demand has led to dealers of LPG cylinders to exploit the situation and overcharge for the cylinders, which has irked the populace.

One such individual is Shaan, who drives a motorcycle for a ride hailing company in Karachi. &ldquo;A few days ago the price of a cylinder was Rs 200 but ever since Ramazan started the prices have increased to Rs 500,&rdquo; bemoaned Shaan, who further complained that the price hike had ruined his monthly budgeting.

Concurring with Shaan, Asif Abbasi, another local, expressed his anger at the fact that the government had increased the price of gas manifold and was a silent spectator as the LPG cylinder mafia was busy profiteering.

Just like Karachiites, the residents of Lahore are similarly perturbed. Muhammad Ejaz, a resident of the city, asserted that the government&rsquo;s assurances of uninterrupted supply of gas during Ramazan were false.

&ldquo;The gas schedule given by the Sui Northern Gas Company is not being followed, as a result gas is non-existent. Moreover, people have installed illegal gas generators at their homes, which has exacerbated out plight,&rdquo; regretted Ejaz. Muhammad Umair, whilst agreeing with Ejaz, opined that the government had left the populace to fend for themselves. &ldquo;Since there is no gas, if we resort to using electricity, the bills are sky-high.

Read&nbsp;PM directs uninterrupted gas, power supply in Ramazan

The other alternative is LPG, which has also become exorbitantly expensive now. What should the people do?&rdquo; Umair&rsquo;s frustration is shared by Sakina, a housewife, who resides in Peshawar.

&ldquo;The gas load shedding has made our lives difficult,&rdquo; she remarked while talking to the Express Tribune. However, it is not just Sakina whose life has become miserable due to the lack of gas supply.

Zahra, another resident of the city, shares her plight. &ldquo;Gas is sometimes available from 4 in the evening to 7 in the evening and if we are lucky it is also available from 4 in the morning to 7 in the morning.

However, with such a limited time slot, neither can we cook properly, nor can we make breakfast for the children, who are not fasting,&rdquo; she explained.

&ldquo;What has made matters worse are the high prices of LPG cylinders. One kilogram of LPG is retailing for Rs 350, which is out of reach for middle class families,&rdquo; she added.

In light of the plight of the people, the Express Tribune also spoke to the LPG Distributors Association.
&ldquo;The official price of LPG is Rs 257 per kilogram.

However, it is true that hoarders and profiteers are retailing LPG between Rs 300 and Rs 350,&rdquo; conceded Irfan Khokhar, Chairman of the LPG Distributors Association of Pakistan. Sikandar Khan, an LPG dealer in Peshawar, also made a similar concession, while talking to the Express Tribune.

&ldquo;Even though LPG prices have increased, it is true that dealers are engaging in profiteering due to the lack of supply of Sui gas,&rdquo; said Khan.

Given Khokhar and Khan&rsquo;s revelations, the Express Tribune inquired from the Spokesperson of the Sui Southern Gas Company, about the lack of uninterrupted gas supply during Ramazan. &ldquo;We are doing our best to ensure supply of gas during sehri and iftar hours,&rdquo; maintained the Spokesperson.]]>
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			<title>European firms oppose LNG permit extension</title>
			<link>https://tribune.com.pk/story/2458908/european-firms-oppose-lng-permit-extension</link>
			<comments>https://tribune.com.pk/story/2458908/european-firms-oppose-lng-permit-extension#comments</comments>
			<pubDate>Sat, 09 Mar 24 19:44:13 +0500</pubDate>
			<dc:creator>
				<![CDATA[REUTERS]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2458908</guid>
			<description>
				<![CDATA[Believe Venture Global LNG has completed plant but has failed to provide cargoes]]>
			</description>
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				<![CDATA[Top European energy companies on Friday asked US regulators to reject Venture Global LNG&rsquo;s request for a one-year construction permit extension to its Louisiana export plant.

Shell, Italian utility Edison, Repsol, Orlen, and Galp Energia oppose the request because they believe Venture Global LNG has completed its plant but has failed to give them contracted cargoes.

Venture Global last month asked for a one-year extension to a Federal Energy Regulatory Commission (FERC) permit to complete its Calcasieu Pass plant, or to receive assurances it did not need an extension.

&ldquo;Shell LNG respectfully requests that the Commission find the extension request, in its conditional form, to be moot and summarily deny it,&rdquo; the company said.

Edison asked the Federal Energy Regulatory Commission to compel Venture Global to release commissioning documents to justify the extension request.

Repsol and Galp told federal regulators they cannot participate fully in the 15-day intervention period because of their lack of access to commissioning documents.

The European companies say they contracted with Venture Global LNG but have not got their gas cargoes under long-term contracts. Venture Global LNG has been selling gas from the plant for more than a year to others, costing them billions in lost profit.

Venture Global LNG on Friday asked the regulatory commission to &ldquo;reject the myriad claims of BP, Shell and Orlen.&rdquo;

Published in The Express Tribune, March 10th, 2024.

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&nbsp;]]>
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			<title>POL imports decline 12.06%</title>
			<link>https://tribune.com.pk/story/2456970/pol-imports-decline-1206</link>
			<comments>https://tribune.com.pk/story/2456970/pol-imports-decline-1206#comments</comments>
			<pubDate>Mon, 19 Feb 24 21:02:54 +0500</pubDate>
			<dc:creator>
				<![CDATA[Our Correspondent]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2456970</guid>
			<description>
				<![CDATA[Offset by increase in LNG, LPG import]]>
			</description>
			<content:encoded>
				<![CDATA[Imports of the overall petroleum group have witnessed a decline of 12.06% during the first seven months of the ongoing financial year 2023-24, as revealed by data released by the Pakistan Bureau of Statistics (PBS). From July to January (2023-24), total petroleum group imports amounted to $9,332.322 million, down from $10,611.727 million in the corresponding period the previous year.

Within the petroleum category, imports of petroleum products notably decreased by 25.94%, falling from $4,889.799 million to $3,621.420 million. Meanwhile, imports of petroleum crude witnessed a smaller decline of 3.96%, dropping from $3,100.481 million to $2,977.671 million during the review period.

On a year-on-year basis, petroleum group imports showed a marginal increase of 0.03% in January 2024 compared to January of the previous year, rising from $1,326.205 million to $1,326.540 million. However, on a month-on-month basis, petroleum imports into the country dropped by 14.52% in January 2024 compared to December 2023 when imports stood at $1,551.870 million, according to the data provided.

Oil industry officials say that the sale of petrol witnessed an average decline of 6%, whereas high-speed diesel saw a 7% decrease during the first seven months of the current financial year. They attribute this decline in sales to inflation and economic slowdown.

Read&nbsp;IHC takes stern action against violation LNG case

Although the prices of petroleum products have substantially declined, they remain relatively expensive, contributing to the decrease in imports. Refineries have also raised concerns over the rise in smuggling of petroleum products from Iran, which has impacted legal industry sales.

Despite the overall decline in petroleum imports, imports of Liquefied Natural Gas (LNG) experienced a 4.82% increase, rising from $2,192.489 million to $2,298.144 million. This increase is attributed to additional LNG cargoes arranged to meet rising demand, particularly during the recent winter season.

Meanwhile, the import of Liquefied Petroleum Gas (LPG) grew by 1.47%, reaching $434.991 million compared to $428.687 million in the corresponding period of 2022-23, driven by increased demand during the winter months due to natural gas shortages for domestic consumers.

Published in The Express Tribune, February 20th, 2024.

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			<title>‘50% increase in global LNG demand by 2040’</title>
			<link>https://tribune.com.pk/story/2456489/50-increase-in-global-lng-demand-by-2040</link>
			<comments>https://tribune.com.pk/story/2456489/50-increase-in-global-lng-demand-by-2040#comments</comments>
			<pubDate>Wed, 14 Feb 24 21:00:53 +0500</pubDate>
			<dc:creator>
				<![CDATA[Our Correspondent]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2456489</guid>
			<description>
				<![CDATA[Global trade in LNG reached 404 million tonnes in 2023, up from 397 million tonnes in 2022]]>
			</description>
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				<![CDATA[Global demand for liquefied natural gas (LNG) is estimated to rise by more than 50% by 2040. This growth is fuelled by industrial coal-to-gas switching in China, as well as South Asia and South-east Asian countries using more LNG to support their economic growth, according to Shell&rsquo;s LNG Outlook 2024.

Global trade in LNG reached 404 million tonnes in 2023, up from 397 million tonnes in 2022, with tight supplies of LNG constraining growth while maintaining prices and price volatility above historic averages. While demand for natural gas has already peaked in some regions, global demand continues to rise, with LNG demand expected to reach around 625-685 million tonnes a year in 2040, according to the latest industry estimates.

&ldquo;China is likely to dominate LNG demand growth this decade as its industry seeks to cut carbon emissions by switching from coal to gas,&rdquo; said Steve Hill, Executive Vice President for Shell Energy. &ldquo;With China&rsquo;s coal-based steel sector accounting for more emissions than the total emissions of the UK, Germany and Turkey combined, gas has an essential role to play in tackling one of the world&rsquo;s biggest sources of carbon emissions and local air pollution.&rdquo;

Notably, over the next decade, declining domestic gas production in parts of South Asia and South-east Asia could drive a surge in demand for LNG.

Published in The Express Tribune, February 15th, 2024.

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			<title>SSGC eyes substitution plan amid depleting reserves</title>
			<link>https://tribune.com.pk/story/2456375/ssgc-eyes-substitution-plan-amid-depleting-reserves</link>
			<comments>https://tribune.com.pk/story/2456375/ssgc-eyes-substitution-plan-amid-depleting-reserves#comments</comments>
			<pubDate>Tue, 13 Feb 24 21:26:17 +0500</pubDate>
			<dc:creator>
				<![CDATA[Salman Siddiqui]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2456375</guid>
			<description>
				<![CDATA[Explores closed wells and tight gas amid LNG affordability concerns]]>
			</description>
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				<![CDATA[Sui Southern Gas Company Limited (SSGC) is awaiting the government&rsquo;s approval signal to create a cost-effective gas import substitution of over $1 billion a year. This strategy involves reutilising closed wells and encouraging exploration firms to discover tight gas. The move comes as imported gas (Liquefied natural gas) has become unaffordable due to massive rupee devaluation in recent times.

While briefing journalists at his office, SSGC Managing Director Imran Maniar highlighted the challenges associated with completing international gas pipeline projects. Projects like the Turkmenistan-Afghanistan-Pakistan-India (TAPI) and Iran-Pakistan (IP) lines are proving to be &ldquo;very, very tough&rdquo;. Additionally, gas prices through these pipelines have risen beyond domestic consumers&rsquo; purchasing power.

Maniar stated that supplying low-cost indigenous gas to industries is no longer feasible for SSGC. Therefore, blending imported gas (LNG) has been proposed as a way forward.

Furthermore, the supply of gas to SSGC from local fields is projected to further deplete to 500 mmcfd (million cubic feet per day) in the next four years, declining over 30% by 2028 from the current 720 mmcfd, he added.

The gas marketing firm was receiving 820 mmcfd from local fields this time last year, marking a 12% reduction to date. This decline is attributed to depleting domestic reserves of oil and gas, with no significant discoveries in the past two decades.

Maniar revealed that SSGC has identified closed wells with the potential to supply a total of 200 mmBtu (million British thermal unit) in the system. Reactivating these wells could save $80 million a month and $1 billion annually in gas imports, he said.

Oil and Gas Development Company (OGDC), Pakistan Petroleum Limited (PPL), Pakistan Oilfields Limited (POL), and Mari Gas have closed wells due to production costs exceeding the selling price of $6/mmBtu. Reactivating these wells would require an additional investment of up to $50 million. However, even with increased costs of $7-7.5/unit, SSGC could sell gas to local industries at $8.5-9/unit, which is still lower compared to imported LNG sold at $15-16/unit, said the MD.

The caretaker government has also approved a tight gas policy, offering $7/mmBtu to exploration firms compared to $6/mmBtu for natural gas at present. This policy aims to tap into tight gas reserves estimated at 25 trillion cubic feet, nearly double the reserves of Sui gas currently standing at 13 trillion cubic feet.

Read&nbsp;SSGC seeks hike amid Rs47b shortfall

Maniar stressed the need to encourage exploration firms by offering competitive prices, suggesting a rate of $7-8/unit to reduce import burdens and lower gas prices nationwide.

Pakistan currently imports 11-12 cargoes of LNG a month. The proposed solutions could potentially cut imports by 3-4 cargoes a month, according to SSGC MD.

&ldquo;Our local exploration firms lack the expertise and technology to find the tight gas. The policy should encourage foreign firms to return to Pakistan along with their external investment,&rdquo; he suggested.

Additionally, Maniar proposed the introduction of a coal-to-gas policy, leveraging Pakistan&rsquo;s vast coal reserves in Tharparker to potentially produce 1,200 mmcfd, exceeding current natural gas supplies. While gas prices through IP and TAPI pipelines could overcome gas supply shortfalls, Maniar cautioned that residential consumers may find it unaffordable, highlighting its suitability for industries.

He also mentioned that gas marketing companies were paying local oil and gas exploration firms in US dollar-denominations instead of in rupee-value, contributing to increased costs due to recent rupee devaluation against the greenback. Regarding subsidised gas for fertiliser manufacturers, Maniar suggested ending subsidised gas sales to them and instead providing direct subsidies to farmers.

PPL, Mari find POL products

In related news, Pakistan Petroleum Limited (PPL) announced significant discoveries in the Hala Block, including 6 mmcd of gas and 452 barrels per day of oil from development well Adam 2.

&ldquo;The development well will add hydrocarbon reserves, enable the energy sector to reduce the gap between the supply and demand of oil &amp; gas during the current energy crisis in the country and will save significant foreign exchange for the country,&rdquo; said a notification to the Pakistan Stock Exchange.

This discovery, a joint venture between PPL and Mari Petroleum, with 65% and 35% working interest.

Published in The Express Tribune, February 14th, 2024.

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&nbsp;]]>
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			<title>Pakistan procures 2nd LNG cargo from Azerbaijan</title>
			<link>https://tribune.com.pk/story/2453585/pakistan-procures-2nd-lng-cargo-from-azerbaijan</link>
			<comments>https://tribune.com.pk/story/2453585/pakistan-procures-2nd-lng-cargo-from-azerbaijan#comments</comments>
			<pubDate>Wed, 17 Jan 24 19:47:09 +0500</pubDate>
			<dc:creator>
				<![CDATA[Zafar Bhutta]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2453585</guid>
			<description>
				<![CDATA[It will arrive in February to meet country’s growing energy needs]]>
			</description>
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				<![CDATA[Despite a very high circular debt in the liquefied natural gas (LNG) supply chain, Pakistan LNG Limited (PLL) has secured another LNG cargo from Azerbaijan&rsquo;s energy company Socar for delivery in February 2024.

This came in the backdrop of an agreement signed by the previous Pakistan Democratic Movement (PDM) government with the Azerbaijan company for gas import without any &ldquo;take or pay damages&rdquo; clause.

So far, state oil marketing giant Pakistan State Oil (PSO) has been a key importer of LNG, which brings gas from Qatar and supplies it to a public gas utility for onward distribution among consumers.

However, the gas utility has not been able to recover the cost of LNG supply, particularly to domestic consumers. As a result, the receivables of PSO have swelled to Rs568 billion because of the provision of imported LNG.

Successive governments have supplied expensive LNG to domestic consumers to overcome gas crisis in every winter. The current government too is providing LNG to residential consumers, which will result in an addition of Rs70 billion to the circular debt.

Now, the caretaker government has asked the Oil and Gas Regulatory Authority (Ogra) to recover Rs232 billion from domestic consumers as the cost of LNG diverted to them from January. Sui Northern Gas Pipelines Limited (SNGPL) has been diverting LNG to domestic consumers during winters according to directives of the federal government. However, the absence of a legal framework has hindered the recovery of its cost.

Earlier, the Pakistan Tehreek-e-Insaf (PTI)-led government passed a bill in parliament for recovering the weighted average cost of gas, including LNG prices, from domestic consumers. However, the bill was challenged in the Sindh High Court where the provincial government of Sindh also joined the opposition.

Read&nbsp;More LNG import advocated

Apart from state companies, the private sector has expressed the desire to import LNG but it could not press ahead with its plans due to bureaucratic hurdles as PLL wants to maintain its monopoly in LNG supplies.

&ldquo;Private sector can help to curtail circular debt if it is given the go-ahead for LNG import,&rdquo; an industry official remarked.

In a statement, the Ministry of Energy (Petroleum Division) and PLL announced that they had successfully procured a second LNG cargo from the State Oil Company of the Azerbaijan Republic (Socar) under the Government-to-Government Framework Agreement.

The cargo has been purchased at less than $11 per million British thermal units and is scheduled to be delivered in February 2024, which will further strengthen energy partnership between Pakistan and Azerbaijan. In July 2023, PLL and Socar signed the landmark Framework Agreement, marking a significant milestone in energy cooperation between the two countries. The agreement stipulates that Socar may offer one LNG cargo per month to PLL while the acceptance of these offers by PLL is subject to the demand for LNG in Pakistan and commercial considerations. This is aimed at ensuring a reliable and consistent supply of LNG to meet Pakistan&rsquo;s growing energy demand.

The successful delivery of the first cargo under this agreement in December 2023 demonstrated the commitment of both PLL and Socar to fulfil the terms of the deal and foster a mutually beneficial partnership.

Published in The Express Tribune, January 18th, 2024.

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			<title>More LNG import advocated</title>
			<link>https://tribune.com.pk/story/2451567/more-lng-import-advocated</link>
			<comments>https://tribune.com.pk/story/2451567/more-lng-import-advocated#comments</comments>
			<pubDate>Fri, 29 Dec 23 20:40:01 +0500</pubDate>
			<dc:creator>
				<![CDATA[Our Correspondent]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2451567</guid>
			<description>
				<![CDATA[Senate panel urges ministry to reach out to global firms for investment]]>
			</description>
			<content:encoded>
				<![CDATA[A Senate panel has stressed the need for allowing liquefied natural gas (LNG) import by private entities to make gas prices more competitive and affordable for consumers.

A meeting of the Senate Standing Committee on Petroleum, headed by Senator Mohammad Abdul Qadir, was held at the Parliament House on Friday.

Committee chairman recommended that officers of the Ministry of Energy (Petroleum Division) must reach out to international companies and encourage them to invest in Pakistan. Since 2015, he noted, the ministry had been purchasing LNG from only two to three bidders, despite the presence of numerous suppliers in the global market.

&ldquo;LNG import permission to private entities can turn the price more competitive,&rdquo; he said while pointing out that several government and private companies were not functioning due to minor disputes.

He asked the ministry to resolve the petty matters to achieve positive results for collective benefits.

Ministry of Energy (Petroleum Division) Secretary Mohsin Agha assured committee members that they were looking forward to drawing up a comprehensive plan and reviewing the policy, adding that improvement in results could be expected within a few weeks.

Members of the Senate panel discussed the suspension of gas supply to the industrial units in Sindh for two days a week, which was causing 28% production loss.

Read&nbsp;Govt to recover Rs232b for LNG

Energy ministry officials said that every year more than 10% of gas reserves were depleting at different fields while consumer demand was increasing day by day.

This year, Sui Southern Gas Company is receiving around 90 million cubic feet per day (mmcfd) less gas compared to last year.

The energy ministry secretary added that the decline in gas deposits had been continuing for the last 8 to 10 years but they were hoping for implementation of a comprehensive plan.

Committee members undertook a thorough analysis of gas supply and its depletion over the years, and recommended to the Ministry of Energy to address discrepancies.

Published in The Express Tribune, December 30th, 2023.

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			<title>China slams sanctions on Russia’s LNG project</title>
			<link>https://tribune.com.pk/story/2451273/china-slams-sanctions-on-russias-lng-project</link>
			<comments>https://tribune.com.pk/story/2451273/china-slams-sanctions-on-russias-lng-project#comments</comments>
			<pubDate>Tue, 26 Dec 23 21:13:35 +0500</pubDate>
			<dc:creator>
				<![CDATA[reuters]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2451273</guid>
			<description>
				<![CDATA[Says no third party should restrict economic cooperation]]>
			</description>
			<content:encoded>
				<![CDATA[China&rsquo;s involvement in Russia&rsquo;s Arctic LNG-2 liquefied natural gas project should not be the target of any third-party intervention or restrictions, its foreign ministry said on Tuesday.

The United States imposed sanctions on Arctic LNG-2 in November as part of a package of sweeping new measures against Moscow over the war in Ukraine. Russian controlling shareholder Novatek has declared force majeure due to the US sanctions, according to sources.

Read&nbsp;Russian-led union signs FTA with Iran

Russian news outlet Kommersant reported on Monday that Chinese state-owned oil majors CNOOC Ltd and China National Petroleum Corp (CNPC), both stakeholders, had also declared force majeure in the project. Economic cooperation between China and Russia was in the mutual interest of both countries and &ldquo;should not be interfered with or restricted by any third party,&rdquo; Chinese foreign ministry spokesperson Mao Ning said at a regular press conference on Tuesday. &ldquo;China has always opposed unilateral sanctions and long-arm jurisdiction without the basis of international law,&rdquo; she added.

Published in The Express Tribune, December 27th, 2023.

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			<title>Govt to recover Rs232b for LNG</title>
			<link>https://tribune.com.pk/story/2451269/govt-to-recover-rs232b-for-lng</link>
			<comments>https://tribune.com.pk/story/2451269/govt-to-recover-rs232b-for-lng#comments</comments>
			<pubDate>Tue, 26 Dec 23 21:05:57 +0500</pubDate>
			<dc:creator>
				<![CDATA[Zafar Bhutta]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2451269</guid>
			<description>
				<![CDATA[Gives fertiliser plants LNG worth Rs15b to be recovered from consumers]]>
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				<![CDATA[In the face of resistance from the Sindh province, the caretaker government is aiming to recoup Rs232 billion, representing the cost of diverting expensive Liquified Natural Gas (LNG) supply to domestic consumers from January 1, 2024.

The gas utility, Sui Northern Gas Pipelines Limited (SNGPL), had redirected costly LNG to domestic consumers during winter seasons to address gas crises as per federal government directives. However, the absence of a legal framework hindered the recovery of LNG prices.

The previous Pakistan Tehreek-e-Insaf (PTI) government had passed a bill on the weighted average cost of gas in Parliament to recover LNG prices from domestic consumers. This bill faced a challenge in the Sindh High Court, with the Sindh government joining the opposition.

Now, the caretaker government has directed the regulator to recover the Rs232 billion gas price from consumers during the revenue requirements determination in January 2024.

In addition to outstanding bills, SNGPL is expected to face an additional bill of around Rs70 billion during the current winter season. The caretaker government follows the precedent set by previous administrations, diverting expensive LNG to domestic consumers during winters to address gas crises, incurring an estimated cost of Rs70 billion.

Implementation of WACOG Bill

The previous government had approved the Weighted Average Cost of Gas (WACOG) bill to recover the full cost of LNG from consumers. However, this move faced legal challenges, particularly from the Sindh government, which seeks cheaper gas supplies for its consumers.

Read&nbsp;LNG imports set to hit 18-month high

The federal government aims to implement the WACOG bill in phases, starting with industries before extending it to the domestic sector. Sources indicate that the gas sector is in jeopardy due to the depletion of indigenous gas. With no major gas discoveries in the last decades and an average depletion rate of 9% per year, the country has become a net importer of LNG.

Government officials warn that failure to implement the WACOG bill and recover the full price of LNG could lead to the financial collapse of gas utilities, including SNGPL and Sui Southern Gas Company (SSGC).

The caretaker government, claiming to have frozen circular debt, recently announced a 139% increase in gas prices. However, the total circular debt in the energy sector stands at Rs4.5 trillion without interest payments, with Rs2.1 trillion in the gas sector and Rs 2.3trillion in the power sector.

Despite these measures, circular debt continues to rise, exacerbated by the diversion of LNG to the domestic sector in recent winter seasons. The Pakistan State Oil (PSO) is owed over Rs800 billion by its clients, while LNG is owed Rs519 billion due to non-recovery from consumers.

The Economic Coordination Committee (ECC) recently approved the supply of expensive LNG to two fertiliser plants, adding another debt of Rs15 billion. Although the actual cost of LNG is Rs3600 mmcfd, the caretaker government decided to supply it to fertiliser plants at the rate of Rs1239 per mmbtu, contributing to another debt expected to be recovered from gas consumers in the revenue requirements determination for gas utilities in January 2024.

In addition, fertiliser plants, which previously received cheaper gas, saw the price of urea rise to Rs5000 per bag, up from the earlier price of Rs3000 per bag. Furthermore, fertiliser manufacturers pocketed billions in Gas Infrastructure Development Cess (GIDC) but failed to deposit these funds into the national exchequer.

Published in The Express Tribune, December 27th, 2023.

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			<title>LNG imports set to hit 18-month high</title>
			<link>https://tribune.com.pk/story/2450965/lng-imports-set-to-hit-18-month-high</link>
			<comments>https://tribune.com.pk/story/2450965/lng-imports-set-to-hit-18-month-high#comments</comments>
			<pubDate>Sat, 23 Dec 23 19:50:57 +0500</pubDate>
			<dc:creator>
				<![CDATA[Salman Siddiqui]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2450965</guid>
			<description>
				<![CDATA[With sharp price fall, Pakistan buys spot cargoes for first time in one year]]>
			</description>
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				<![CDATA[Pakistan&rsquo;s liquefied natural gas (LNG) imports are all set to surge to an 18-month high with 11 cargoes arriving in December this year as the country has placed orders for two spot cargoes for the first time in the past one year.

A substantial fall in LNG prices from their peak in the international spot market and with the advent of winter when demand from household consumers spikes prompt the country to return to the spot market.



design: mohsin alam

However, prices in the ready market are relatively higher than the rates at which Pakistan purchases LNG from global suppliers under long-term agreements spanning 10 to 15 years. Talking to The Express Tribune, Arif Habib Limited Head of Research Tahir Abbas said Pakistan had bought two LNG cargoes at prices slightly below the average of $16 per million British thermal units (mmBtu), which would be delivered in December 2023.

In addition to these, two gas marketing companies &ndash; Pakistan State Oil (PSO) and Pakistan LNG Limited (PLL) &ndash; have bought nine cargoes at an average price of $10.67 per mmBtu from QatarEnergy LNG (formerly Qatargas) and Gunvor under long-term deals.

&ldquo;The purchase of two cargoes from the spot market has pushed LNG imports to 18-month highs,&rdquo; Abbas revealed, adding that Pakistan had been buying on average 8 to 10 cargoes per month over the past 17 months.

For the past many months, Pakistan has stayed away from the spot market since the LNG price peaked at around $40 per mmBtu in the winter of 2022 and managed local supplies through load management.

Read&nbsp;$500m secured for LNG projects

Most of the imported LNG is expected to be supplied to household consumers to enable them to use heaters and geysers to remain warm in freezing temperatures in chilly regions like Balochistan.

However, many businesses remain reluctant to consume the imported gas because of its exorbitant cost compared to the locally produced natural gas, which is going scarce day by day. The two public gas utilities namely Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company (SSGC) are selling indigenous gas to industries at prices ranging from Rs2,100 to Rs3,600 per mmBtu, according to the revised prices for November 2023 notified by the Oil and Gas Regulatory Authority (Ogra).

&ldquo;Imported gas costs range from Rs3,500 to Rs4,000 per mmBtu,&rdquo; said Ogra Chairman Masroor Khan at a public hearing earlier this week.

He stressed that the nation needed to accept LNG as a reality, sooner rather than later, as local gas reserves were depleting consistently. On average, Pakistan&rsquo;s gas reserves are falling 9% per annum.

Abbas said an average of 3,200 million cubic feet of gas per day (mmcfd) was being produced from local fields. Besides, import of 11 cargoes in December will make available around 1,100 mmcfd in the month.

A total of 4,300 mmcfd will be supplied to consumers in December, but it is way short of the estimated requirement of 6,500 mmcfd.

Gas utilities will manage the deficit through outages in the comparatively lesser cold regions, for different industries and low demand from power plants.

These utilities supply a blend of local and imported gas at different ratios to the industries, which demand maximum supply of cheaper local gas instead of the expensive LNG.

Ogra has notified the re-gasified LNG price at $14.81 per mmBtu for SNGPL for December 2023, which is 9.8% higher than the price for November. For SSGC, it has notified the RLNG price at $15.45 per mmBtu, up 10.11% than the previous month.

Abbas pointed out that a reason for the higher RLNG price for SSGC as compared to SNGPL was the line losses &ndash; called unaccounted for gas (UFG). For the latter, the UFG stands higher at 14.9% compared to 8.8% for the former.

To reduce reliance on the imported gas, local oil and gas exploration companies are required to be encouraged to ramp up search for new deposits.

Published in The Express Tribune, December 24th, 2023.

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			<title>PSO receivables surge past Rs800 billion</title>
			<link>https://tribune.com.pk/story/2450776/pso-receivables-surge-past-rs800-billion</link>
			<comments>https://tribune.com.pk/story/2450776/pso-receivables-surge-past-rs800-billion#comments</comments>
			<pubDate>Thu, 21 Dec 23 20:06:24 +0500</pubDate>
			<dc:creator>
				<![CDATA[Our Correspondent]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2450776</guid>
			<description>
				<![CDATA[Of total amount, Rs519b is to be received for LNG supplies]]>
			</description>
			<content:encoded>
				<![CDATA[Pakistan State Oil (PSO) is facing a never ending circular debt challenge with its receivables crossing the unprecedented Rs800 billion mark as clients have not been able to make payments on time.

The oil marketing company&rsquo;s debt has started ballooning since entering the liquefied natural gas (LNG) market. A public gas utility to which PSO supplies imported LNG owes Rs519 billion. Last month, the caretaker government made a massive increase of up to 139% in gas prices with claims it had frozen the circular debt. But the debt is still rising because of LNG supplies, the demand for which surges in winter.

For LNG imports, PSO had entered into an agreement with Qatar Petroleum under a government-to-government (G2G) arrangement. But LNG purchases put an extra burden on the company.

At present, PSO has to recover Rs802 billion from its clients compared to receivables of Rs362 billion in August 2021.

It supplies oil to different clients as well as LNG to a gas utility. Power generation companies are among the major defaulters that have to pay Rs150.8 billion. Hubco owes Rs29.5 billion whereas Kapco has liabilities of Rs5 billion.

Pakistan International Airlines (PIA) is another big defaulter. PSO supplies jet fuel to the airline to help continue its operations. The air carrier has not been able to clear its dues, which have accumulated to Rs27.9 billion.

Read&nbsp;ECC approves Rs100b guarantee for PSO

PSO also has to recover Rs8.9 billion from the government on account of price differential claims.

With the piling up of receivables, the company is now finding it difficult to pay dues of oil refineries with the payables going up to alarming levels.

It has to pay Rs48.8 billion to the refineries. Of the total, the company owes Rs26.6 billion to Pak-Arab Refinery Company (Parco), Rs8.4 billion to Pakistan Refinery Limited, Rs4.1 billion to National Refinery Limited, Rs6.9 billion to Attock Refinery Limited, Rs1.7 million to Byco and Rs1 billion to Enar.

PSO is the country&rsquo;s largest oil importer. It has an agreement with Kuwait Petroleum to whom the company has to pay Rs104 billion on account of Letters of Credit opened for oil and LNG imports.

However, PSO&rsquo;s financial results have demonstrated its agility and strength across a diverse portfolio despite the challenging economic scenario and recurrent waves of the pandemic.

Published in The Express Tribune, December 22nd, 2023.

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			<title>Abbasi says will not contest polls</title>
			<link>https://tribune.com.pk/story/2450506/abbasi-says-will-not-contest-polls</link>
			<comments>https://tribune.com.pk/story/2450506/abbasi-says-will-not-contest-polls#comments</comments>
			<pubDate>Tue, 19 Dec 23 07:29:58 +0500</pubDate>
			<dc:creator>
				<![CDATA[our.correspondent]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2450506</guid>
			<description>
				<![CDATA[Hearing of LNG reference against ex-PM, others adjourned till February 13, 2024]]>
			</description>
			<content:encoded>
				<![CDATA[Former Prime Minister Shahid Khaqan Abbasi announced on Tuesday that he will not participate in the upcoming general elections scheduled for February 8.

Addressing the media after appearing in an accountability court in Islamabad, the former PML-N leader expressed his frustration with the prolonged case against him, which has been pending in court for four years with no witnesses coming forward.

Abbasi voiced his discontent, highlighting that, for a mere procedural matter in a meeting, he has had to navigate in and out of accountability courts and that &quot;today&rsquo;s NAB chairman does not even know that people&rsquo;s lives are being destroyed&rdquo;.

Referring to the apex court, he said it has opened at night for certain high-profile cases, but it has failed to take notice of other cases pending in courts for years

Earlier, the lawyer of the ex-PMLN leader had appeared at the accountability court before Judge Muhammad Bashir in the Liquefied Natural Gas (LNG) reference against Abbasi.

Read NAB a problem of our own making: Abbasi

His counsel had pleaded that as there was an intra-court appeal before the SC, the court should adjourn the hearing.

Abbasi is one of the 15 accused in the LNG reference and appeared before the court on Tuesday. The hearing has been adjourned till February 13, 2024.

The NAB filed a reference on December 3, 2019, against Abbasi, former finance minister Miftah Ismail, former chairperson of the Oil and Gas Regulatory Authority (OGRA) Uzma Adil Khan and others for allegedly misusing powers in the LNG import agreement, allegedly causing a loss of Rs47 billion to the national exchequer.

Abbasi and the others were accused of illegally awarding the LNG terminal contract for a period of 15 years to a company of their liking in violation of rules.

The inquiry into the LNG contract case was initiated in 2019, almost one-and-a-half year after the NAB Karachi office closed a similar inquiry against Abbasi for his alleged role in the award of a multi-billion-rupee contract for the import and distribution of LNG.
&nbsp;

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			<title>‘Non-stop winter flow of gas to fertiliser sector’</title>
			<link>https://tribune.com.pk/story/2449861/non-stop-winter-flow-of-gas-to-fertiliser-sector</link>
			<comments>https://tribune.com.pk/story/2449861/non-stop-winter-flow-of-gas-to-fertiliser-sector#comments</comments>
			<pubDate>Tue, 12 Dec 23 20:35:38 +0500</pubDate>
			<dc:creator>
				<![CDATA[APP]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2449861</guid>
			<description>
				<![CDATA[Minister says govt ordered two LNG cargoes for December, one for January]]>
			</description>
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				<![CDATA[Caretaker Minister for Petroleum, Muhammad Ali on Tuesday said the government was committed to ensuring uninterrupted gas supply to all fertiliser plants throughout the current winter season to maximise fertiliser production.

&ldquo;In the current year, it has been decided that fertiliser plants will operate at full capacity without any closure during the winter months to achieve maximum fertiliser output,&rdquo; he said while addressing a press conference.

He specifically emphasised that Fatima Fertiliser and Agritech, which traditionally close for three months during winter, would remain operational at full capacity this year.

&ldquo;All plants, including Fatima Fertiliser and Agritech, will be running at full capacity throughout the current winter season,&rdquo; he affirmed, adding, the decision to keep operating all the plants at their maximum capacity was aimed to ensure a consistent and sufficient local supply of fertiliser to farmers.

Responding to a question, minister said the government had ordered two Liquefied Natural Gas (LNG) cargoes for December and one for January to meet domestic gas requirements.

However, he acknowledged that the country currently faced insufficient gas production to meet demand as local gas reserves are depleting by approximately 10% annually. At the same time, consumption continued escalating with each passing day, he added.

Read&nbsp;Punjab to raise fertiliser alarm

The minister also assured that the government was actively working to improve the infrastructure for Liquefied Petroleum Gas (LPG) supply across the country.

He mentioned ongoing efforts to revise the LPG policy, with certain proposed changes, and hinting that it would soon be presented to the cabinet for approval.

Regarding the exploration sector, he acknowledged that inefficient policies of the past led international companies to exit from Pakistan due to non-payment.

However, he assured that the government was working to vitalise the exploration of new hydrocarbon reservoirs and local gas production to meet domestic requirements. Responding to another query about the removal of the Managing Director of Saindak Metals Limited (SML), Ali clarified that the decision was made in line with the prevailing laws and service rules of the company, under the instructions of the Islamabad High Court.

Published in The Express Tribune, December 13th, 2023.

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			<title>$500m secured for LNG projects</title>
			<link>https://tribune.com.pk/story/2449070/500m-secured-for-lng-projects</link>
			<comments>https://tribune.com.pk/story/2449070/500m-secured-for-lng-projects#comments</comments>
			<pubDate>Tue, 05 Dec 23 20:53:35 +0500</pubDate>
			<dc:creator>
				<![CDATA[Zafar Bhutta]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2449070</guid>
			<description>
				<![CDATA[Deal with Chinese, UAE firms signals independence from govt guarantees]]>
			</description>
			<content:encoded>
				<![CDATA[Pakistan is poised to embark on two new LNG projects, attracting a substantial $500 million in foreign investment. The China National Chemical Engineering Company (CNCEC), a leading Chinese contractor, and LNGFlex Limited, a subsidiary of Bison Energy based in the United Arab Emirates, have formalised a Master EPCF (Engineering Procurement Construction and Finance) contract for these significant liquefied natural gas (LNG) initiatives in Pakistan.

These projects mark a historic milestone as they will be the first in the country to operate without government guarantees. Construction work on Project 1 is scheduled to commence in Q4 2024, with the second Project Final Investment Decision (FID) expected in 2025.

Bison Energy is set to independently procure LNG through private imports, collaborating with international suppliers from countries such as Oman, Abu Dhabi, Australia, and Nigeria. Importantly, this strategy will be entirely independent of Pakistan LNG Limited (PLL), with no government funds allocated for the private procurement process.

In addition, Bison Energy aims to directly market the acquired gas to end customers through its dedicated marketing company, eliminating reliance on Sui Southern Gas Company (SSGC) or Sui Northern Gas Pipelines Limited (SNGPL).



design: mohsin alam

The first V-LNG project is strategically utilising Virtual trucks for supply, overcoming limitations posed by the existing SUI pipeline, which is currently operating at reduced capacity.

Earlier, the Competition Commission of Pakistan (CCP) granted approval to a UAE-based company for the acquisition of two entities: Tabeer Energy (Pvt) Ltd (TEPL) and Tabeer Energy Marketing (Pvt) Ltd (TEMPL). These companies were engaged in establishing and operating an LNG terminal, as well as the import, storage, and distribution of Liquefied Natural Gas (LNG) and re-gasified liquefied natural gas (RLNG) in Pakistan.

The CCP approved the 100% acquisition of TEPL and TEMPL by the UAE-based Bison Energy FZCO. Following the merger transactions, Bison Energy acquired the entire shareholding of TEPL and TEMPL from Diamond Gas International Japan Co Ltd.

The initial project, known as V-LNG or the Pluto project, involves establishing a &ldquo;virtual pipeline supply chain.&rdquo; This comprehensive initiative encompasses constructing an LNG receiving terminal, an onshore LNG storage tank area, filling facilities, and associated infrastructure within the Karachi Port area. The second undertaking, referred to as the R-LNG project or Ambush project, entails developing a long-distance gas pipeline supply chain. This includes LNG receiving terminals, gasification units, long-distance pipelines, and supporting infrastructure in the Port Qasim area of Karachi. Upon completion, the V-LNG project is projected to supply a peak capacity of 750 million cubic feet per day to the local natural gas market, as stated by CNCEC.

Read:&nbsp;Avenues with UAE

Under the terms of the Master EPCF contract, CNCEC will be responsible for the design, construction, and financing of both terminals. The total EPC cost is anticipated to exceed $500 million, contingent on the final designs selected by LNGFlex. Notably, LNGFlex is considering constructing onshore LNG storage tanks at its V-LNG terminal, marking a pioneering development in Pakistan.

The project aims to ensure an uninterrupted supply of LNG to customers in and around Karachi in ISO tanks, offering competitive pricing.

During the signing ceremony, Shahid Karim, Chief Executive Officer of LNGFlex, expressed excitement about reaching this historic milestone. He emphasised the transformative impact of both projects on the Pakistani energy landscape, highlighting their benefits to consumers in Pakistan without posing any risk or cost to the public and the government. Furthermore, he underscored the potential for foreign investment, job creation, and environmental improvement.

CNCEC, a part of the state-owned Sinochem Group, is recognised as the world&#39;s largest oil and gas contractor with a successful track record in developing multiple LNG terminals globally. Chairman of CNCEC, Zhou Hong, underscored the company&#39;s longstanding engagement with the Pakistani market and its commitment to the &quot;Belt and Road&quot; initiative. He expressed hope that the collaboration on these projects would strengthen the bonds of China-Pakistan friendship and contribute significantly to the comprehensive cooperation between the two countries.

LNGFlex, incorporated in Pakistan, aims to establish and operate LNG and integrated regasification infrastructure in the country. The company plans to source LNG from various locations such as Oman, Abu Dhabi, Australia, and Nigeria. The clientele of LNGFlex will include Pakistan&#39;s small-to-medium industrial sector, heavy transport market, and housing market.

Published in The Express Tribune, December 6th, 2023.

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&nbsp;]]>
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			<title>PSO keen on OGDCL, Mari Petroleum shares</title>
			<link>https://tribune.com.pk/story/2445993/pso-keen-on-ogdcl-mari-petroleum-shares</link>
			<comments>https://tribune.com.pk/story/2445993/pso-keen-on-ogdcl-mari-petroleum-shares#comments</comments>
			<pubDate>Sat, 11 Nov 23 20:52:14 +0500</pubDate>
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				<![CDATA[Zafar Bhutta]]>
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			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2445993</guid>
			<description>
				<![CDATA[Makes move to tackle risk of mounting debt crisis, default]]>
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				<![CDATA[Pakistan State Oil (PSO), grappling with severe financial challenges, is exploring a strategic path to acquire shares in state-owned oil and gas exploration companies and power firms. This move is aimed at addressing the pressing issue of the company&rsquo;s burgeoning circular debt, which threatens to push it into default.

The Economic Coordination Committee (ECC) recently approved sovereign guarantees of Rs100 billion to bolster PSO&rsquo;s financial position, signaling the gravity of the situation. The company is currently burdened with receivables exceeding Rs 700 billion, significantly hampering its ability to sustain operations.

Sources revealed to The Express Tribune that PSO is keen on acquiring shares in two major oil and gas exploration companies, namely Oil and Gas Development Company Limited (OGDCL) and Mari Petroleum, as part of its strategy to settle the looming circular debt. Additionally, efforts are underway to transfer the Nandipur Power Plant to PSO, and the company is eyeing the acquisition of Gujranwala Electric Power Company (Gecpo) to establish a footprint in the power sector.

&ldquo;The acquisition of power companies will be another significant step in expanding PSO&rsquo;s presence in the power sector,&rdquo; according to informed sources. PSO had previously established PSO Renewable Energy (Pvt.) Limited, with a focus on developing and executing renewable energy projects in alignment with the government&rsquo;s renewable energy policy.

While traditionally confined to marketing petroleum products, PSO diversified into the LNG business in 2015 through a long-term supply contract with Qatar on a government-to-government basis. This strategic move broadened PSO&rsquo;s business scope but also led to the creation of circular debt due to the absence of a legal framework for gas utilities to supply expensive LNG to domestic consumers.

Read Caretakers bet on LNG to tackle winter gas crisis

Presently, PSO is anticipating over Rs 450 billion from Sui Northern Gas Pipeline Limited (SNGPL) for supplying LNG, yet unresolved due to the lack of a mechanism to recover LNG costs from domestic consumers. Despite the caretaker government&rsquo;s recent gas price hike of up to 139%, PSO&rsquo;s financial struggles persist, prompting the approval of sovereign guarantees for a Rs 100 billion borrowing from banks.

In addition to SNGPL, power companies are major defaulters, owing over Rs180 billion to PSO. Notable among them are Gencos with a debt of over Rs150 billion, Hubco with Rs28 billion, and Kapco with Rs5 billion. These companies, chronic defaulters, have not paid PSO for fuel supplies for power generation.

Pakistan International Airlines (PIA) also stands as a substantial defaulter, owing Rs 26 billion to PSO for fuel supply to run the operations of the national carrier. PSO, which also sources fuel from local oil refineries, is grappling with over Rs 60 billion in dues to these refineries.

To compound the financial challenges, PSO imports RLNG from Qatar and oil from Kuwait Petroleum Corporation, requiring over Rs 230 billion to clear dues for these LNG and oil supplies, including payments for Letters of Credit (LCs).

Published in The Express Tribune, November 12th, 2023.

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			<title>Caretakers bet on LNG to tackle winter gas crisis</title>
			<link>https://tribune.com.pk/story/2445404/caretakers-bet-on-lng-to-tackle-winter-gas-crisis</link>
			<comments>https://tribune.com.pk/story/2445404/caretakers-bet-on-lng-to-tackle-winter-gas-crisis#comments</comments>
			<pubDate>Wed, 08 Nov 23 04:44:49 +0500</pubDate>
			<dc:creator>
				<![CDATA[Zafar Bhutta]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category><category><![CDATA[Business]]></category>
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			<description>
				<![CDATA[Decision to provide expensive LNG to avert gas crisis]]>
			</description>
			<content:encoded>
				<![CDATA[The caretaker government is betting on providing expensive Liquefied Natural Gas (LNG) to the people and industries during the winter season to overcome the looming gas crisis. The move is likely to have an impact as it would add to the already mounting circular debt.

The previous governments had been supplying expensive LNG to the consumers during the cold spell, which also resulted in a similar situation.

At present, LNG has caused a major spike in the circular debt for state-run marketing company Pakistan State Oil (PSO) that was scheduled to receive Rs470 billion from the Sui Northern Gas Pipeline Limited (SNGPL) on account of LNG supplies.

PSO imports LNG from Qatar on contract basis and supplies to SNGPL. But SNGPL had not been able to receive dues from the domestic consumers due to the absence of legal framework, and therefore, did not pay to the PSO.

Now, Caretaker Energy Minister Muhammad Ali announced that they would provide imported LNG to people and industries, especially during the winter season, which may add to the circular debt.

Read Govt raises gas prices amid Rs2tr loss

Speaking at the 29th Annual Technical Conference (ATC) organized by the Society of Petroleum Engineers (SPE) and the Pakistan Association of Petroleum Geo-scientists (PAPG), the minister expressed the hope that the gathering of experienced geo-scientists and engineers would spark new ideas for the exploration of indigenous oil and gas resources in the country.

He praised the conference&#39;s theme, &quot;Exploring the Unexplored: High-Risk Plays and Economic Challenges,&quot; and believed it was highly relevant to the current situation.

PSO, already grappling with financial difficulties, was scheduled to receive over Rs700 billion from its customers, out of which Rs470 billion were to be collected on account of LNG supplies.

Keeping in view the current situation, this winter season may be hard for both SNGPL and PSO if the government supplies expensive LNG to domestic customers to minimize gas shortages.

The caretaker government has already announced that gas will be supplied three times a day for cooking purposes, and that it had arranged one additional LNG cargo for December and two for January 2024.

These cargoes are meant to overcome the rising demand of gas during the winter season, resulting in another addition to the circular debt in the gas sector.

While addressing the energy conference, Ali was confident that the event would offer opportunities to address the ongoing challenges and strategy for the development of energy resources, especially in the field of oil and gas exploration.

Read more&nbsp;Privatisation of LNG plants, DISCOs put on fast track

Highlighting the untapped potential of Pakistan&#39;s sedimentary basin, the energy minister noted that nearly 60-70 per cent of the country remains unexplored for oil and gas, emphasizing the need to reduce fuel imports.

He also mentioned the government&#39;s efforts to attract foreign direct investment (FDI) in the oil and gas sector and the importance of fostering international collaboration.

He underscored that the international oil companies (IOCs) consider factors like geographical access, technology, community engagement, operational feasibility, security, and long-term sustainability while investing.

Recent discoveries by Mari Petroleum and OGDCL have demonstrated the technical and commercial viability of the industry, but security challenges must be addressed.

The minister acknowledged that Pakistan faced energy shortages and was heavily reliant on fossil fuels, which made up a significant portion of the energy mix.

He explained that the global oil price fluctuations and increased energy import costs due to geopolitical factors pose economic challenges.

Ali called for discussions during the conference on technical, economic, and regulatory measures to reduce the energy import bill and encouraged participants to share their insights on addressing these challenges, both locally and globally.
He expressed optimism that the conference would serve as a valuable platform for generating innovative initiatives and solutions to drive the industry forward.]]>
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			<title>Sindh, K-P to pay more for gas</title>
			<link>https://tribune.com.pk/story/2442041/sindh-k-p-to-pay-more-for-gas</link>
			<comments>https://tribune.com.pk/story/2442041/sindh-k-p-to-pay-more-for-gas#comments</comments>
			<pubDate>Thu, 19 Oct 23 20:34:13 +0500</pubDate>
			<dc:creator>
				<![CDATA[Zafar Bhutta]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2442041</guid>
			<description>
				<![CDATA[Export industries of Punjab will get cheaper blend of local gas and LNG]]>
			</description>
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				<![CDATA[The Petroleum Division has, in a summary prepared for review by the Economic Coordination Committee (ECC), proposed a massive increase in gas prices for all categories of consumers effective from October 1, 2023.

Additionally, the division has recommended the mixing of locally produced gas and imported liquefied natural gas (LNG) for supply to export-focused industries, which will put an additional burden on other gas consumers.

According to sources, natural gas will become expensive for Sindh and Khyber-Pakhtunkhwa (K-P), the two major gas producing provinces, whereas it will become cheaper for goods exporting sectors including their captive power plants, which are highly inefficient.

The National Accountability Bureau (NAB) has earlier termed supply of local gas to the inefficient captive plants while ignoring the efficient power plants a criminal offence.

In the summary, the Petroleum Division has proposed the mixing of 25% locally produced gas with LNG for export industries in Punjab but it will hit revenues of public gas utilities. Moreover, the control of mixing is being given to the companies, which may manipulate gas supplies, say experts.

Sources pointed out that the new formula would make gas expensive for Sindh and K-P and there were fears that the two provinces would go into litigation with the federal government. They have already opposed the provision of subsidised gas to Punjab.

According to the summary, gas will be made expensive for domestic consumers to subsidise supplies to the export sectors, though the International Monetary Fund (IMF) opposes gas subsidies.

There had already been controversy over the supply of subsidised gas to the export sector. According to a study conducted by the Petroleum Division during the Pakistan Tehreek-e-Insaf (PTI) government, those millers received subsdised gas whose sales had increased in the domestic market but they did not export anything. Even the Finance Division has pointed out that textile exports jumped owing to depreciation of the rupee but in terms of quantity no increase had been observed in shipments.

The Petroleum Division has also proposed a massive increase in fixed charges for the protected domestic gas consumers.

The domestic consumers falling in the first four slabs were paying fixed charges of Rs10 per month, which may be increased to Rs400, according to the proposal of the Petroleum Division.

Non-protected domestic consumers were paying fixed charges of Rs460 per month and now it has been proposed to jack them up to Rs1,000 to Rs2,000.

The Petroleum Division has said that the gas sector has no budgeted subsidies and affordability for certain consumer categories is ensured through the cross-subsidy funded by surplus revenues created in other consumer categories.

The average prescribed price of each molecule is Rs1,291 per million British thermal units (mmBtu) but the protected category of domestic consumers is paying in the range of Rs121 to Rs250 per mmBtu under four consumption slabs.

There will be no increase in tariff for the protected category (57% of the domestic consumers), however, the fixed monthly charges may be increased from Rs10 to Rs400.

The tariff for non-protected domestic consumers will be increased marginally for initial slabs with progressivity in tariffs for onward slabs until the highest consumption where tariff will be aligned with the cost of liquefied petroleum gas (LPG).

This is being proposed in an attempt to discourage unbridled consumption and press those who can afford to switch over to alternative fuels to conserve gas. The benefit of previous slab is being maintained up to the consumption of 4 hm3. There will be no previous slab benefit in the last slab of the non-protected domestic category.

Fixed charges for the non-protected category may be increased for two slabs &ndash; Rs1,000 per month for consumption up to 1.5 hm3 and Rs2,000 for consumption exceeding 1.5 hm3.

The tariff for bulk domestic consumption is proposed to be increased from Rs1,600 per mmBtu to Rs2,000 whereas there will be no change in tariff for the special commercial (Roti Tandoor) category.

Commercial sector

It is pertinent to highlight that piped gas is an urban phenomenon covering only 30% of the country&rsquo;s population. The rest of the population is already using LPG as an alternative fuel.

Some 51% of commercial consumers on piped gas are paying re-gasified LNG prices whereas 49% are paying natural gas prices. The existing tariff is proposed to be revised from Rs1,650 per mmBtu to Rs3,900, which still reflects a discount on the switching value of LNG or LPG.

This rate will be applicable to all commercial consumers, irrespective of the use of LPG or RLNG, to create a level playing field for all commercial consumers.



design: Ibrahim Yahya

Power sector

There are very few power plants connected to networks of Sui companies and most of them receive dedicated gas supplies and RLNG.

Considering the increasing cost of generation due to the fuel mix, there will be no change in gas tariff for power generation to avoid any burden on domestic consumers of the power sector.

Export industry (processing and captive)

Currently, there is a wide price disparity between the industries operating on networks of Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipelines Limited (SNGPL).

Industries in the north (operating on the SNGPL network) consume a 50:50 blend of indigenous gas and RLNG for nine months (March to November) and 100% RLNG for three months (December to February), with average tariff of $9.6 (Rs2,790) per mmBtu over the year.

On the other hand, the processing connections of industries in the south (operating on the SSGC network) are being charged Rs1,100 per mmBtu. SSGC has recently started supplying blended gas in proportion of 75:25 to captive plants, which approximately costs $5.9 (Rs1,710) per mmBtu.

The Petroleum Division has stressed that industrial tariff incentives are aimed at promoting production and exports despite a higher component of RLNG and the rising cost of both natural gas and RLNG.

It stressed that it would eliminate discrimination and create a level playing field for the existing and new players to encourage industrialisation and minimise disparity between the industries operating in the north and the south.

Published in The Express Tribune, October 20th, 2023.

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			<title>Privatisation of LNG plants, DISCOs put on fast track</title>
			<link>https://tribune.com.pk/story/2440851/privatisation-of-lng-plants-discos-put-on-fast-track</link>
			<comments>https://tribune.com.pk/story/2440851/privatisation-of-lng-plants-discos-put-on-fast-track#comments</comments>
			<pubDate>Thu, 12 Oct 23 22:08:37 +0500</pubDate>
			<dc:creator>
				<![CDATA[Zafar Bhutta]]>
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			<category><![CDATA[Business]]></category>
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			<description>
				<![CDATA[Power Division asked to step up efforts to remove bottlenecks]]>
			</description>
			<content:encoded>
				<![CDATA[The caretaker government has stepped up efforts to privatise two liquefied natural gas (LNG)-based power plants as well as power distribution companies (DISCOs), though it faces scores of bottlenecks in policy decisions.

The Power Division has prepared a summary, which will seek approval of the Council of Common Interests (CCI) for the acquisition of DISCOs by provinces.

The caretaker government is considering two options &ndash; either to privatise DISCOs or hand over them to provinces. But there are several obstacles that have stymied progress.

The interim administration has been informed that prior actions need to be taken for the privatisation of DISCOs, which include balance sheet cleaning, outlining tariff rules, transfer of government equity to provinces, the future receivables&rsquo; mechanism in the context of erstwhile Fata and AJK, privatisation of supply-side or distribution-side business or both, licensing regulations and criteria, etc.

Negotiations with labour unions are also an essential prerequisite. The Privatisation Commission (PC) has recommended the way forward.

The caretaker government may direct the Power Division and the National Electric Power Regulatory Authority (Nepra) to address the challenges to pave the way for PC to press ahead with the privatisation process.

In a recent meeting, the Cabinet Committee on Privatisation (CCOP) was informed that World Bank experts in March 2021 had recommended concession contracts and management contracts for private sector participation in DISCOs.

CCOP and the PC board approved both in May 2021 as the most viable options. Later, in June 2022, the CCOP asked the Power Division to consult with all provinces on taking over management control of DISCOs.

In early 2023, the Prime Minister&rsquo;s Office constituted a 12-member committee, headed by the minister of defence, to look into the matter of handing over DISCOs&rsquo; control to the provincial governments.

Later, the PC shared transaction-specific comments for consideration of the Power Division in response to a draft policy for the acquisition of DISCOs by the provinces.

However, there were bottlenecks like heavy payments to the Pakistan Development Fund Limited (PDFL), Sui Northern Gas Pipelines Limited (SNGPL) and receivables from the Central Power Purchasing Agency-Guarantee (CPPA-G). Privatisation of DISCOs may be possible only after the resolution of those issues, the CCOP was told.

LNG-based plants

It was pointed out that the government may hand over two LNG-fired power plants, running under the National Power Parks Management Company Limited (NPPMCL), to the United Arab Emirates (UAE).

NPPMCL, incorporated in 2015, owns and operates 1,230-megawatt LNG-based Haveli Bahadur Shah and 1,223MW Balloki plants.

In September 2019, the CCOP approved 100% divestment of NPPMCL or the two power plants independently by adopting a hybrid structure, which was later ratified by the cabinet in October 2019.

Out of 23 interested parties, 12 submitted the requisite documents and were pre-qualified by the PC board. However, bidding process could not begin due to the Covid-19 pandemic.

The CCOP chairperson gave the directive to hold a meeting of the committee focused on power sector transactions in an attempt to develop a clear plan of action. It was emphasised that the Power Division should initiate efforts to remove the bottlenecks in liaison with PC, Petroleum and Finance Divisions.

Published in The Express Tribune, October 13th, 2023.

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			<title>Domestic users should expect gas tariff hike</title>
			<link>https://tribune.com.pk/story/2437094/domestic-users-should-expect-gas-tariff-hike</link>
			<comments>https://tribune.com.pk/story/2437094/domestic-users-should-expect-gas-tariff-hike#comments</comments>
			<pubDate>Thu, 21 Sep 23 19:01:58 +0500</pubDate>
			<dc:creator>
				<![CDATA[our.correspondent]]>
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			<category><![CDATA[Pakistan]]></category>
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			<description>
				<![CDATA[Interim energy minister says companies working on finding reserves left country]]>
			</description>
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				<![CDATA[Caretaker Federal Energy Minister Muhammad Ali on Thursday said domestic consumers should expect an increase in the price of gas as the country was suffering a loss of Rs1 billion each day in this sector.

While talking to the media in Lahore, Ali said the interim set-up had received an inherited difference in the gas tariff.

He added that the gas price difference in the country needed to be fixed, for which the calculations had been completed.

The federal caretaker minister said it was the first right to give gas to the province from which it originated.

He maintained that the country&rsquo;s gas sector was running in losses of Rs1 billion daily and Rs30 billion on an annual basis.

Ali said the companies working on finding gas reserves had left Pakistan.

He continued that there was a shortage of gas in the entire country.

The caretaker federal minister said as the country had entered into an agreement with the International Monetary Fund (IMF), it could not reduce the gas prices but would increase the tariff instead as per the pact with the Washington-based lender.

He pledged that there would be no increase in the gas tariff for the low-income groups.

However, he pointed out that the rich in the cities also used cheap gas and this procedure was definitely unfair.

Read also:&nbsp;Govt plans special gas tariff for low-income group

Ali said that his ministry was trying to import more liquefied natural gas (LNG).

&ldquo;We are trying to order more cargoes [of LNG],&rdquo; he added.

The caretaker federal minister pointed out that the target to increase exports was set at $37 billion this year.

Pakistan&rsquo;s oil and gas reserves have depleted by 17% and 6%, respectively, in the past one year till June 2023 as no major hydrocarbon discovery has been made since long.

It signals that leftover deposits will be fully consumed in the next 15 years, according to a research house that cited the data of the Pakistan Petroleum Information Services (PPIS).

Experts point out that Pakistan meets only 30% of its energy requirement through the local production of oil and gas while the remaining 70% needs are met through expensive imports. For this, the country has to arrange huge foreign exchange reserves.

The share of energy stands at around 25% (around $1 billion per month) in the country&rsquo;s total import bill.

Industry players has been waiting for years for the announcement of a new oil and gas exploration policy, comprising incentives like an attractive increase in prices, to accelerate production activities in the country.

The previous policy was announced over a decade ago in 2012. Different governments initiated work from time to time on a new policy, but to no avail.]]>
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			<title>Power tariffs raised under IMF deal: PM</title>
			<link>https://tribune.com.pk/story/2427703/power-tariffs-raised-under-imf-deal-pm</link>
			<comments>https://tribune.com.pk/story/2427703/power-tariffs-raised-under-imf-deal-pm#comments</comments>
			<pubDate>Mon, 24 Jul 23 09:57:38 +0500</pubDate>
			<dc:creator>
				<![CDATA[Our Correspondent]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
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			<description>
				<![CDATA[Shehbaz says 63% consumers to stay unaffected by move]]>
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				<![CDATA[Prime Minister Shehbaz Sharif said on Monday that the government has increased power tariffs again under an International Monetary Fund deal, part of moves to reduce unsustainable public debt in the power and gas sector.

The price rises of up to Rs5.75 ($0.020) a unit would not impact poorer citizens, he said. Consumers of up to 200 units -- 63% of the total -- would be exempt from the tariff increase.

Besides, he said a partial subsidy was also being given to the consumers of up to 300 units per month which comprise around 31% of the total domestic consumers.

&ldquo;We had to increase electricity prices because of the IMF deal,&rdquo; the prime minister said after witnessing the signing of a framework agreement between State Oil company of Azerbaijan Republic (SOCAR) and Pakistan LNG Limited (PLL).

&ldquo;Due to the toughest conditions from the International Monetary Fund (IMF), the government had to raise the electricity prices but I stressed that the burden should not be passed on to the protected segments of the society,&rdquo; he said

The lender had pointed out that liquidity conditions in the power sector were acute, with a buildup of arrears and frequent power outages.

The arrears -- a form of public debt that builds up due to subsidies and unpaid bills -- were a major issue in the eight months of negotiations between the IMF and Islamabad before a deal was reached last month. Debts to power generation companies have accumulated to nearly Rs2.6 trillion ($9.04 billion), according to official figures, which show a separate government debt of around Rs1.6 trillion ($5.56 billion) to the gas sector.

&quot;It is a gaping hole,&quot; the prime minister said, adding, &quot;We have to deal with this on a war footing.&quot;

The power sector is beset by theft, which needs to be overcome, he said.

Read Power tariff hike

Under the framework agreement, SOCAR Trading has offered LNG supply to Pakistan in the form of one cargo per month, on flexible terms and with credit lines for 30 days after delivery of the cargo on one year contract which is extendable by another year.

The prime minister said it was really a great day as &ldquo;we are standing here as brothers from two brotherly countries Pakistan and Azerbaijan&quot;.

Addressing the soft launching of Ombre Special Economic Zone, Sundar Green Special Economic Zone and Smart Special Economic Zone in Sheikhupura, Shehbaz said that the utilisation of modern technology and alternative energy by the industrial sector were inevitable to make exports competitive in the international market.

The prime minister said owing to surging oil prices, the only option was to exploit the potential of solar, wind, and hydel energy for cost-effectiveness of local products.

He said the issue of circular debt was required to be addressed on a war-footing basis, which was swelling due to wastage of billions of rupees annually because of line and transmission losses as well as power theft.

The prime minister appreciated the private sector for chalking out a plan to establish the three special economic zones, assuring of all-out support by the federal and Punjab governments.

He said the commitment by the private sector to attract investment worth billions of rupees was also laudable, besides their plans to set up a three-megawatt solar power plant and other allied facilities like the vocational training center.

(With input from Agencies)]]>
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			<title>Pakistan turns to Azerbaijan for LNG</title>
			<link>https://tribune.com.pk/story/2422018/pakistan-turns-to-azerbaijan-for-lng</link>
			<comments>https://tribune.com.pk/story/2422018/pakistan-turns-to-azerbaijan-for-lng#comments</comments>
			<pubDate>Fri, 16 Jun 23 03:36:07 +0500</pubDate>
			<dc:creator>
				<![CDATA[APP]]>
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			<category><![CDATA[Pakistan]]></category>
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			<description>
				<![CDATA[Import to start next month as Shehbaz, Ilham agree to enhance ties]]>
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				<![CDATA[Azerbaijan will start sending cargo containers of liquefied natural gas (LNG) to Pakistan from next month, another major achievement for Pakistan towards fulfilling its energy needs after importing the Russia crude oil.

The decision was taken during a meeting between Prime Minister Shehbaz Sharif and Azerbaijan&#39;s President Ilham Aliyev in Baku on Thursday, the Prime Minister&rsquo;s Office said in a statement.

&ldquo;Every month, one cargo [of LNG] on concessional rates will reach Pakistan [from Azerbaijan],&rdquo; it added. &ldquo;The two leaders agreed that Azerbaijan would help Pakistan fulfil its energy needs through cooperation in the fields of oil and gas.&rdquo;

The Prime Minister&rsquo;s Office further said that the Pakistan State Oil (PSO) and the State Oil Company of the Azerbaijan Republic (SOCAR) would collaborate at the government-to-government level to work out the energy resources.

The two leaders agreed to enhance cooperation in defence, agriculture, trade and transport. Azerbaijan would invest in the alternative energy sector of Pakistan, including the solar power generation, the Prime Minister&rsquo;s Office said.

On the import of Pakistani rice to Azerbaijan, both the countries agreed on formulating a comprehensive mechanism on the exemption of duty. It was also agreed that the Azerbaijan Airlines (AZAL) would operate two weekly flights to Islamabad and Karachi.

Prime Minister Shehbaz arrived in the Azeri capital of Baku on Wednesday night on two-day official visit. After their meeting, the Shehbaz and President Aliyev Aliyev informed the media about the decisions taken during the bilateral talks at a joint news stakeout.

They said that they agreed to introduce AZAL flights between the two capitals, enhance number of joint military exercises, besides exploring the avenues of cooperation in the areas of energy, investment and education.

&ldquo;Pakistan welcomes the Azerbaijan airline to start its operations to Islamabad,&rdquo; the prime minister said, as he invited the Azeri aviation minister to visit Pakistan and also work out plans for the Baku-Karachi flights with a view to promoting tourism.

The prime minister thanked Azerbaijan for being a staunch supporter of the Kashmir cause and highlighted the Indian acts of terror and atrocities in the occupied Valley, including the violations of UN resolutions.

He said that Pakistan was committed to the territorial integrity of Azerbaijan and appreciated the bravery of Azeri forces. He said Pakistan did not recognise Armenia and always stood by Azerbaijan, considering it a duty.

At the joint media stakeout, Prime Minister Shehbaz spoke highly of the leadership of President Aliyev to build the city&#39;s infrastructure and impressive horticulture. Shehbaz, also visited the mausoleum of Azerbaijan first president Haider Aliyev and the martyrs monument.]]>
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			<title>ECC okays LNG import agreement</title>
			<link>https://tribune.com.pk/story/2421752/ecc-okays-lng-import-agreement</link>
			<comments>https://tribune.com.pk/story/2421752/ecc-okays-lng-import-agreement#comments</comments>
			<pubDate>Wed, 14 Jun 23 19:45:37 +0500</pubDate>
			<dc:creator>
				<![CDATA[Shahbaz Rana]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2421752</guid>
			<description>
				<![CDATA[Gas purchase from Azerbaijan will help bridge energy shortages]]>
			</description>
			<content:encoded>
				<![CDATA[Pakistan on Wednesday approved a one-year framework agreement for import of liquefied natural gas (LNG) from Azerbaijan, in a move that would help minimise energy shortages besides cementing bilateral relations.

The Economic Coordination Committee (ECC) of the cabinet approved the pending framework agreement hours before the start of a two-day visit of Prime Minister Shehbaz Sharif to the Central Asian Republic.

The ECC considered a summary of the Ministry of Energy on the framework agreement between Pakistan LNG Limited (PLL) and State Oil Company of Azerbaijan Republic (SOCAR) Trading, according to a statement issued by the finance ministry.

The framework agreement has been approved for one year and can be extended for another year, according to the energy ministry. Pakistan can import one cargo per month but the price will be determined and agreed every time Azerbaijan makes an offer.

SOCAR will offer LNG cargo 45 days prior to the start of the relevant delivery window and each offer for the cargo will have a set validity period during which PLL may accept the offer.

The price will be offered in American currency for each cargo with a &ldquo;quantity of 3.2 million MMBTU&rdquo;. Pakistan will make payment within 30 days.

The Letter of Credit confirmation charges will be on sellers&rsquo; account, according to the approved framework agreement.

Each cargo offer will also include the applicable demurrage rate expressed as a fixed amount in US dollar per day and pro rata for each part of a day.

PLL and SOCAR will sign a confirmation notice at the time the offer for any cargo is accepted by PLL.

&ldquo;The ECC directed the Ministry of Energy to determine our need for LNG at least three months in advance on a rolling basis,&rdquo; said the finance ministry.

Pakistan State Oil (PSO) and PLL are importing LNG under long-term supply contracts to minimise the demand and supply gap under three different deals with Qatar and a European company.

The first long-term agreement had been signed by PSO with Qatargas in 2015 at 13.37% of Brent price for five cargoes per month for 15 years, which is ending in 2030.

The second PSO-Qatargas agreement was inked in 2021 at 10.2% of Brent price for 10 years, according to which Qatargas is to supply three cargoes every month from July 2022 to December 2023 and four cargoes per month from January 2024 to December 2032.

PLL and Eni also signed an agreement in 2017 at 12.05% of Brent price, according to which Eni is to supply one cargo per month for 15 years.

In addition, PLL has been importing up to three LNG cargoes a month through spot tenders.

However, due to high prices, lack of sufficient available financing and weak credit rating, Pakistan has been struggling to buy these cargoes.

An Inter-Governmental Agreement (IGA) was signed between Pakistan and Azerbaijan in February 2017 for cooperation in the field of energy. PLL, SOCAR Trading and its subsidiaries have been nominated to negotiate necessary contractual details of the LNG project.

The framework agreement summary had earlier been presented to the ECC on multiple occasions. Owing to disagreement between the Petroleum Division and former PM Shahid Khaqan Abbasi, the ECC had deferred approval of the framework agreement.

There are no financial obligations or take-or-pay commitments if Pakistan does not buy any cargo from Azerbaijan. However, LNG may only be procured under the agreement if an attractive price is offered or expensive LNG is desperately required as a last resort.

Since the validity of the price offered by SOCAR will be less than 24 hours, the PLL board has been given the mandate to accept or reject LNG cargoes based on suitability of the price.

The ECC also approved Rs404.8 million in supplementary grant for the Cabinet Division for the repair of helicopters used for relief operation and VVIP movements.

It approved Rs157.7 million in additional funds in favour of the Ministry of Industries and Production for the payment of salaries of Heavy Electrical Complex (HEC) employees, markup to the Bank of Khyber, and meeting operating expenses.

It directed the Privatisation Commission to complete the HEC privatisation process by June 30, 2023.

Published in The Express Tribune, June 15th, 2023.

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			<title>OGRA opens up LNG market</title>
			<link>https://tribune.com.pk/story/2415452/ogra-opens-up-lng-market</link>
			<comments>https://tribune.com.pk/story/2415452/ogra-opens-up-lng-market#comments</comments>
			<pubDate>Sun, 07 May 23 06:56:59 +0500</pubDate>
			<dc:creator>
				<![CDATA[Our Correspondent]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2415452</guid>
			<description>
				<![CDATA[Sets transportation tariff for liquefied natural gas shippers]]>
			</description>
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				<![CDATA[The Oil and Gas Regulatory Authority (Ogra) has set a transportation tariff for liquefied natural gas (LNG) shippers in an attempt to open up the market for private sector. At present, public gas utilities have a monopoly in the LNG market. In a statement, Ogra said that under its Gas Third Party Access (TPA) Rules 2018, it determined the transportation tariff for Sui Northern Gas Pipelines Limited (SNGPL) for financial years 2019- 20 and 2020-21.

Ogra has allowed a tariff of Rs29.58 per million cubic feet (mcf) for the transmission network and Rs101.75 per mcf for the distribution network. SNGPL, however, had claimed tariffs of Rs38.85 per mcf and Rs125.77 per mcf for the transmission and distribution network respectively. The transportation tariff has been determined for the shipper who transports gas through the SNGPL&rsquo;s network.

The regulator observed that in the case of distribution, the petitioner (SNGPL) had shown its inability to calculate capacity of the system. It added that the present gap between supply and demand of natural gas coupled with reduced pressure was the major constraint to calculating the available capacity of the system. While calculating the throughput of distribution network, SNGPL excluded the volumes of gas carried to Pakistan Oilfields Limited (POL), Pakistan Petroleum Limited (PPL) and Pak Arab Refinery as well as unaccounted-for-gas (UFG) volumes.

The regulator pointed out that the approach adopted by SNGPL based on throughput was not in accordance with the TPA Rules. &ldquo;Rather it is the petitioner&rsquo;s own misinterpretation.&rdquo; It observed that a TPA regime had been implemented to proceed towards liberalisation of the gas industry to foster competition and reduce tariff, while improving energy supply through the injection of additional volumes by potential suppliers. &ldquo;This scheme is a win-win situation for the petitioner and potential shippers as it will result in supply of additional volumes to customers, thus addressing issues of reduced pressure, volume curtailment, etc,&rdquo; the statement said.

&ldquo;The authority also considers it important to impress upon the petitioner to facilitate the TPA regime and avoid banging on non-convincing reasons for declaring supply to consumers on the distribution network by third parties as unfeasible.&rdquo; It was highlighted during a hearing held earlier that the petitioner was enjoying a monopoly in the gas market and was not providing the opportunity to other shippers. United Gas Distribution Company Limited (UGDCL), despite a lapse of around eight years, could not bring even a single cargo owing to various hindrances in the system. &ldquo;Such continued practice by the petitioner will result in collapse of the entire TPA regime, which will fail to achieve its objective,&rdquo; the regulator warned.

SNGPL&rsquo;s management was requested to provide details of shippers and their contracted capacity. Prospective shippers are in the market but restrictions have been placed by the transporter to prevent the shippers from supplying gas to the existing consumers, it said.]]>
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			<title>Bills of residential LNG consumers swell to Rs200b</title>
			<link>https://tribune.com.pk/story/2407376/bills-of-residential-lng-consumers-swell-to-rs200b</link>
			<comments>https://tribune.com.pk/story/2407376/bills-of-residential-lng-consumers-swell-to-rs200b#comments</comments>
			<pubDate>Tue, 21 Mar 23 20:09:10 +0500</pubDate>
			<dc:creator>
				<![CDATA[Zafar Bhutta]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2407376</guid>
			<description>
				<![CDATA[In absence of legal framework, gas utilities fail to make recoveries]]>
			</description>
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				<![CDATA[The decisions of different governments to divert expensive liquefied natural gas (LNG) to the residential consumers in winter in a bid to address gas shortages have resulted in piling up of huge consumer bills of Rs200 billion.

In the absence of a legal framework, the two public gas utilities running in the country have failed to recover the LNG bills from domestic consumers.

Pakistan State Oil (PSO) imports around eight to nine LNG cargoes per month from Qatar. Under the term contracts, the delivered cost of each cargo for February 2023, at the rate of $12.7148 per million British thermal units (mmBtu), comes to $41 million. The cumulative financial impact of nine cargoes imported in a month will be $369 million.

Sui Northern Gas Pipelines Limited (SNGPL), which has not been able to recover the LNG cost from domestic consumers, has to pay Rs492 billion to PSO on account of LNG supplies. This has sparked fears of disruption to LNG imports.

According to officials, LNG diversion to the domestic sector in winter always carries some tariff differential, which accumulated to a total of Rs200 billion up to February 2023. However, the budgetary subsidy to cover the differential is only Rs25 billion for the current fiscal year.

The Petroleum Division has so far released Rs12.50 billion after approval of the Finance Division.

On average, the power sector consumes up to 70% of re-gasified LNG whereas the remaining is supplied to the exporting and non-exporting industry, fertiliser manufacturers, commercial consumers, compressed natural gas (CNG) filling stations, cement firms and domestic consumers.

SNGPL provides RLNG to the exporting industry and fertiliser manufacturers at subsidised rates and their recovery is contingent upon the budgetary subsidy.

In the case of exporting industry, Rs40 billion has been allocated for subsidy in FY23, which is sufficient to meet the SNGPL&rsquo;s requirement.

There were pending claims of Rs26.059 billion for the subsidised RLNG supply to two fertiliser plants, ie Fatima Fertiliser and Agritech Limited, till January 3, 2023, when the Economic Coordination Committee (ECC) decided to discontinue the subsidised supplies.

For the provision of RLNG to the power sector, payments to SNGPL were also overdue, which were not being fully realised timely.

In a recent meeting, the Petroleum Division informed the ECC that PSO had given an SOS call for releasing funds as the company&rsquo;s liquidity position was under severe stress.

Its receivables had soared to an all-time high of Rs773 billion, most of which were owed by SNGPL, which had to pay Rs498 billion.

On the other hand, PSO&rsquo;s borrowing had reached Rs411 billion, leading to a higher finance cost of Rs43 billion in the current fiscal year and the projected Rs73 billion for next year, which would completely erode the company&rsquo;s profit.

As per contracts with LNG suppliers, PSO is required to clear an invoice on the 15th day after completion of cargo unloading and/or the 10th banking day after receipt of invoice from the supplier, whichever is later.

The release of budgetary subsidy is being delayed by the Finance Division owing to the constrained fiscal space and the limit on expenditures. This has led to the accumulation of subsidies of Rs14.45 billion for the exporting sector and the diversion of RLNG.

It may be recalled that the ECC, in its meeting held on January 3, 2023, considered and approved a summary of the Petroleum Division on the borrowing of Rs50 billion in favour of PSO backed by sovereign guarantee.

PSO was in the process of borrowing funds as the Letter of Comfort was lately issued by the Finance Division on February 16, 2023.

However, the company was of the view that even after the recent arrangement, there was not much improvement in its liquidity requirement, which may result in default on the international payment obligations.

Published in The Express Tribune, March 22nd, 2023.

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			<title>Gas shortage exposes economies to more pain</title>
			<link>https://tribune.com.pk/story/2402291/gas-shortage-exposes-economies-to-more-pain</link>
			<comments>https://tribune.com.pk/story/2402291/gas-shortage-exposes-economies-to-more-pain#comments</comments>
			<pubDate>Mon, 20 Feb 23 20:31:24 +0500</pubDate>
			<dc:creator>
				<![CDATA[reuters]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2402291</guid>
			<description>
				<![CDATA[Retail sector urges govt to relax 8:30pm shutdown orders during Ramazan]]>
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				<![CDATA[With a little over a month to go for peak shopping season during Ramzan, the head of Pakistan&rsquo;s retail industry body is shuttling between meetings, pressing officials to relax orders that forced malls to shut by 8.30pm to save energy.

More than 40% of annual retail sales occur in the 30 days of the holy month, and malls are packed between 8pm and 10pm, Tariq Mehboob, also the Chief Executive of Pakistani menswear franchise Royal Tag, said in a letter to the government.

&ldquo;Early closure could result in job losses for 3-4 million people,&rdquo; Mehboob wrote.

Fear in the retail sector highlights how a shortage of imported gas has cut power output and hit the economy in Pakistan, just as it reels from soaring inflation and a sliding currency. Bangladesh faces the same issues.

Both countries are scrambling to avoid a repeat of massive power cuts they faced last year, but industry officials and analysts say the crisis is likely to worsen this year because of a sharp drop in imports of liquefied natural gas (LNG).

Pakistan and Bangladesh are heavily dependent on gas for power generation, but have had to slash their imports of LNG after prices rocketed on a surge in Europe&rsquo;s demand to replace Russian supplies following the Ukraine war.

&ldquo;High spot LNG prices and dwindling domestic production will mean that Pakistan will continue facing issues with ramping up gas-fired power generation,&rdquo; said Poorna Rajendran, LNG consultant at FGE.

&ldquo;We expect power outages to worsen in 2023,&rdquo; he said.

Despite LNG prices having fallen from last year&rsquo;s record highs, the super-chilled fuel is still expensive for South Asian buyers as their currencies have weakened sharply, making it hard for them to boost LNG imports this year.

Pakistan relies on gas for a third of its electricity output, but is grappling with dwindling foreign exchange reserves to pay for energy imports.

Ship tracking data from Kpler shows Pakistan&rsquo;s LNG imports in 2022 fell 17% from the previous year to a five-year low.

As a result, in the first 11 months of 2022, Pakistan&rsquo;s gas-fired power production fell 4.4%, even as overall generation rose by 1.8% to 129 gigawatt hours (GWh), data from energy think tank Ember showed.

Published in The Express Tribune, February 21st, 2023.

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			<title>Govt considers reviving Pakistan-Russia gas pipeline project</title>
			<link>https://tribune.com.pk/story/2398903/govt-considers-reviving-pakistan-russia-gas-pipeline-project</link>
			<comments>https://tribune.com.pk/story/2398903/govt-considers-reviving-pakistan-russia-gas-pipeline-project#comments</comments>
			<pubDate>Wed, 01 Feb 23 20:27:22 +0500</pubDate>
			<dc:creator>
				<![CDATA[Zafar Bhutta]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2398903</guid>
			<description>
				<![CDATA[Contemplates shifting its ‘starting point’ from Karachi to Gwadar]]>
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				<![CDATA[Pakistan is considering shifting the &lsquo;starting point&rsquo; of the Russia&rsquo;s Pakistan Stream Gas Pipeline from Karachi to Gwadar, a move likely to help resume work at the abandoned LNG Gwadar Pipeline Project that connects with Iran.

In 2015, Pakistan and Russia signed an Inter-Governmental Agreement to execute the North South gas pipeline project which was later renamed the &lsquo;Pakistan Gas Stream Project&rsquo; to transport LNG from Karachi to Lahore.

According to the initial model, Russia was to provide 85% funding whereas Pakistan was to provide 25%.

This project was on a build, own, operate, transfer (BOOT) basis which was to be transferred to Pakistan.

Initially, Russia had nominated RT Global to complete the project whereas Pakistan had nominated the state-owned Inter State Gas Systems (ISGS). In early 2016, however, soon after the nomination made by the Russian government, the US imposed sanctions against RT Global &ndash; leaving the North South Gas Pipeline Project in doldrums.

Since then, Pakistan and Russia changed the structure of the North South Gas Pipeline Project almost six times but could not find any way out to complete the project.

In July 2021, the two sides again changed the structure of the gas pipeline project and decided that Pakistan&rsquo;s state-owned gas companies will hold 74% of the shares whereas the Russian firms would own 26% shares.

This meant that the Pakistani companies were to invest 74% of the total funding required whereas the Russian firms would provide 26%.

The government companies were meant to invest from the Gas Infrastructure Development Cess (GIDC) proceeds, worth over Rs400 billion, being held by the textile and fertiliser companies.

While the Supreme Court of Pakistan decided to receive the pending collection on account of GIDC from the private sector in instalments, the lower courts, however, granted stay orders. The funds are now held by the fertiliser and textile companies again.

Given this situation, the government of Pakistan is considering two options.

Under option one, the petroleum division mulled over changing the starting point of the Pakistan Gas Stream Pipeline from Karachi to Gwadar.

Earlier, Pakistani company ISGS and Chinese companies had worked on the Gwadar LNG pipeline which was supposed to connect to the Iranian border to complete the Iran Pakistan (IP) gas pipeline project.

During PML-N&rsquo;s previous regime, however, Saudi Arabia built pressure on former prime minister Nawaz Sharif to cancel the LNG deal with Qatar and the IP gas pipeline project amid a row with Qatar.

Under pressure, the then government shelved the LNG Gwadar Pipeline Project &ndash; the one considered to be an alternate plan to complete the IP gas pipeline project to ease pressure from Saudi Arabia. The PML-N government, however, had not shelved the LNG deal with Qatar.

&ldquo;Shifting the starting point of LNG from Karachi to Gwadar means that the government of Pakistan is going to revive the LNG Gwadar Pipeline project,&rdquo; a senior government official told the Express Tribune.

Sources informed that Pakistan and Russian companies had completed a route survey from Karachi to Lahore to lay Pakistan gas stream pipeline project and other formalities.

The two sides were to arrive at commercial terms and conditions to finalise the tooling fee to transport gas, government officials said, adding that shifting the starting point of the LNG pipeline from Karachi to Peshawar will mean starting the project from scratch.

&ldquo;The other option is that the government of Pakistan and Russia shelve the structure of the project agreed in July 2021 and renew the initial model of handing over the entire project to Russia to execute on BOOT basis,&rdquo; explained officials.

They said that even the Russian side had agreed to these models.

In the current situation, however, there is no LNG available for Pakistan and therefore, there may be no benefit in building an LNG pipeline, officials stated, adding that the second LNG terminal was also currently being run on lower capacity due to the non-availability of LNG in the global market.

Pakistan LNG Limited (PLL), a state-owned company, had tried its best to strike an LNG deal but no party had shown interest.

The current winter season has been tough for consumers due to the non-availability of LNG. State Minister for Petroleum, Musadik Malik had initiated a plan to distribute LPG cylinders to consumers. This, however, did not yield any benefit to the consumers as the LPG black market sprang into action.

Published in The Express Tribune, February 2nd, 2023.

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			<title>Russia ready to resume gas supplies to Europe</title>
			<link>https://tribune.com.pk/story/2392999/russia-ready-to-resume-gas-supplies-to-europe</link>
			<comments>https://tribune.com.pk/story/2392999/russia-ready-to-resume-gas-supplies-to-europe#comments</comments>
			<pubDate>Tue, 27 Dec 22 04:28:34 +0500</pubDate>
			<dc:creator>
				<![CDATA[Reuters]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2392999</guid>
			<description>
				<![CDATA[Aims to send gas to Pakistan, Afghanistan]]>
			</description>
			<content:encoded>
				<![CDATA[Moscow is ready to resume gas supplies to Europe through the Yamal-Europe Pipeline, Russian Deputy Prime Minister Alexander Novak told state TASS news agency.

&ldquo;The European market remains relevant, as the gas shortage persists, and we have every opportunity to resume supplies,&rdquo; TASS cited Novak as saying in remarks published by the agency on Sunday. The Yamal-Europe Pipeline usually flows westward, but has been mostly reversed since December of 2021 as Poland turned away from buying from Russia in favour of drawing on stored gas in Germany.

He also said that Moscow expects it will have shipped 21 billion cubic metres (bcm) of liquefied natural gas (LNG) to Europe in 2022.

&ldquo;This year we were able to significantly increase LNG supplies to Europe,&rdquo; Novak said. Novak also said that in the long-term, Russia can send its natural gas to the markets of Afghanistan and Pakistan, either using the infrastructure of Central Asia, or in a swap from the territory of Iran.]]>
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			<title>LNG supply disruption feared</title>
			<link>https://tribune.com.pk/story/2391098/lng-supply-disruption-feared</link>
			<comments>https://tribune.com.pk/story/2391098/lng-supply-disruption-feared#comments</comments>
			<pubDate>Thu, 15 Dec 22 03:38:10 +0500</pubDate>
			<dc:creator>
				<![CDATA[Zafar Bhutta]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2391098</guid>
			<description>
				<![CDATA[PSO facing shortfall of billions of rupees in winter gas purchases]]>
			</description>
			<content:encoded>
				<![CDATA[Pakistan State Oil (PSO) is being haunted by the spectre of disruption to the liquefied natural gas (LNG) supply chain because of a liquidity crunch as it will require Rs548 billion for gas import in March 2023.

In November, state-owned oil marketing giant PSO faced a financing shortfall of Rs70 billion and it is feared that it will continue to swell in the coming months.

Liquidity shortfall has been projected at Rs118 billion for December 2022, Rs162 billion for January 2023, Rs226 billion for February and Rs263 billion for March.

It is blamed on delay in the payment of outstanding dues by Sui Northern Gas Pipelines Limited (SNGPL), which itself has to receive billions of rupees from the residential consumers owed since previous winter seasons.

SNGPL immediately requires a financing of Rs120 billion for onward payment to the oil marketing firm. PSO, along with Pakistan LNG Limited (PLL), is engaged in LNG import to bridge the demand-supply gap in the country.

Re-gasified LNG (RLNG) is predominantly supplied to the SNGPL consumers while a small volume is injected into the Sui Southern Gas Company (SSGC) network.

Among the SNGPL consumers, the major one is power plants that on average consume up to 70% of RLNG whereas the remaining is supplied to the exporting and non-exporting industries, fertiliser plants, commercial consumers, compressed natural gas (CNG) stations, cement plants and domestic consumers.

On the SSGC network, RLNG is supplied to K-Electric, the exporting and non-exporting industries and CNG filling stations.

During the period from November 2022 to February 2023, PSO is importing a maximum quantity of LNG in terms of the number of cargoes under long-term contracts with Qatar Energy.

At current prices, the delivered cost of each cargo is calculated at $45 million for October 2022, therefore the cumulative financial impact of 10 cargoes will be around $450 million each month.

The RLNG tariff, notified by the Oil and Gas Regulatory Authority (Ogra) for October 2022, was $13.7080 per million British thermal units (mmbtu) for the transmission network and $14.7850 per mmbtu for the distribution network.

PSO is importing eight to nine LNG cargoes per month and according to the contracts struck with LNG suppliers, it must clear the invoice on 15th day after the completion of cargo unloading and 10th banking day after the receipt of invoice from the supplier, whichever is later.

PSO has furnished its net liquidity requirement on a month-on-month basis for the period November 2022 to March 2023. Up to 92% of PSO&rsquo;s LNG imports are sold to the SNGPL network and only 8% is supplied to the SSGC system.

SNGPL will likely face trouble in the recovery of full RLNG cost from the domestic consumers, who are sold gas at an average price of Rs450 per mmbtu.

In addition to this, RLNG is provided to two fertiliser plants, namely Agritech and Fatima Fertiliser, at a concessionary rate of Rs839 per mmbtu. This is resulting in subsidy accumulation as the budgeted subsidy of Rs15 billion is only sufficient to meet claims up to August 2022 whereas subsidy claims are due till November 2022.]]>
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			<title>Germany to get new Qatari LNG flows</title>
			<link>https://tribune.com.pk/story/2388782/germany-to-get-new-qatari-lng-flows</link>
			<comments>https://tribune.com.pk/story/2388782/germany-to-get-new-qatari-lng-flows#comments</comments>
			<pubDate>Wed, 30 Nov 22 05:00:49 +0500</pubDate>
			<dc:creator>
				<![CDATA[reuters]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2388782</guid>
			<description>
				<![CDATA[Long-term agreement will provide two million tonnes LNG annually to Germany]]>
			</description>
			<content:encoded>
				<![CDATA[Germany is set to receive new flows of Qatari liquefied natural gas (LNG) from 2026 after QatarEnergy and ConocoPhillips on Tuesday signed two sales and purchase agreements for its export covering at least a 15-year period.

Since Russia&rsquo;s invasion of Ukraine in February, competition for LNG has become intense, with Europe in particular needing vast amounts to help replace Russian pipeline gas that used to make up almost 40% of the continent&rsquo;s imports.

The deal, the first of its kind to Europe from Qatar&rsquo;s North Field expansion project, will provide Germany with two million tonnes of LNG annually, arriving from Ras Laffan in Qatar to Germany&rsquo;s northern LNG terminal of Brunsbuettel, QatarEnergy&rsquo;s chief executive said. &ldquo;(The agreements) mark the first ever long-term LNG supply agreement to Germany, with a supply period that extends for at least 15 years, thus contributing to Germany&rsquo;s long-term energy security,&rdquo; Saad al-Kaabi said in a joint news conference with ConocoPhillips CEO Ryan Lance.

A ConocoPhillips subsidiary will purchase the agreed quantities to be delivered to the German receiving terminal, which is currently under development.&nbsp;]]>
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			<title>Lack of planning harms LNG supply chain</title>
			<link>https://tribune.com.pk/story/2388439/lack-of-planning-harms-lng-supply-chain</link>
			<comments>https://tribune.com.pk/story/2388439/lack-of-planning-harms-lng-supply-chain#comments</comments>
			<pubDate>Sat, 26 Nov 22 20:37:55 +0500</pubDate>
			<dc:creator>
				<![CDATA[Zafar Bhutta]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2388439</guid>
			<description>
				<![CDATA[It led to circular debt of billions that trapped state-run utilities]]>
			</description>
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				<![CDATA[Deficiencies in the legal structure and infrastructure and lack of strategic planning have marred the liquefied natural gas (LNG) supply chain in Pakistan.

Analysing the LNG framework and its supply chain, auditors have pointed out several deficiencies like lack of a proper structural and legal framework and proper planning, which harm LNG business.

They said that it resulted in a circular debt of billions of rupees, which had trapped state-run utilities. In its report for financial year 2021-22, the Auditor General of Pakistan said that gas utilities were helping in the sale and purchase of LNG between importers and buyers without any agreement.

Gas utilities and consumers have no back-to-back agreements, which lead to disputes among stakeholders in the LNG supply chain. Auditors presented a critical review of the situation and highlighted key issues. State-run companies import LNG according to demand from the gas utilities. However, due to inconsistent demand from the utilities, the LNG importing companies are compelled to procure gas from spot market with less delivery time and at higher prices.

Furthermore, refusal from end-consumers to receive the demanded quantity of re-gasified LNG upsets the entire supply chain. Auditors also pointed out that Pakistan LNG Limited (PLL) had rescheduled the delivery of term cargoes for the period when LNG was available at a low cost.

Spot LNG prices stood low in the summer of 2020 due to Covid-19. It was required to secure LNG for the upcoming winter season, which was not done, and in November and December 2020, gas was procured at higher rates for winter season.

Auditors said that stakeholders also failed to develop LNG infrastructure (terminals for re-gasification capacity, no storage and pipeline constraints) as envisaged in the LNG Policy 2011.

Consequently, existing infrastructure is used to maintain the RLNG supply chain, which has given rise to a dispute between two gas companies. Sui Southern Gas Company (SSGC) withholds RLNG volumes by transporting less quantity in violation of a third-party agreement (TPA) whereas Sui Northern Gas Pipelines Limited (SNGPL) stops payments on account of terminal/ re-gasification and administrative charges and also bears exchange loss adjustment payable to Pakistan State Oil (PSO)/ PLL.

Auditors observed that the Petroleum Division, in consultation with all, makes need/ demand assessment for LNG. Discrepancies in the assessment of stakeholders including the Power Division hamper comprehensive planning.

In line with a decision of the Economic Coordination Committee (ECC), RLNG was required to be supplied to the public/ private sector/ bulk consumers under firm contracts with a &ldquo;take-or-pay&rdquo; clause. But no firm back-to-back contracts were finalised with independent power producers (IPPs) and contracts with government power producers (GPPs) were finalised only up to 66% take-or-pay (instead of 100%).

However, later the ECC decided that RLNG supply to IPPs would be on &ldquo;as and when&rdquo; basis. This inconsistency in decision-making resulted in delay in finalisation of a gas sale-purchase agreement (GSPA) with IPPs and execution of TA-1 (tripartite agreement) among PSO, SSGC and SNGPL could not be done.

Thus, the whole RLNG sale/ purchase business remained at risk. In the absence of assurance of payments for the contracted offtake, the three public sector entities &ndash; PSO, SSGC and SNGPL &ndash; were exposed to the risk of possible financial insolvency. Unpaid subsidies by the government along with receivables from the power sector are other factors responsible for the piling up of circular debt. Currently, PSO is to receive over Rs300 billion from SNGPL on account of LNG supply.

On the other side, SNGPL&rsquo;s receivables have risen to Rs95.666 billion and Rs75.498 billion on account of cost of RLNG/ diversion to domestic consumers, and Wapda and IPPs/GPPs respectively. Exchange loss adjustment had also gone up to Rs5.315 billion by September 30, 2021.

Published in The Express Tribune, November 27th, 2022.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.]]>
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			<title>Minister seeks firms’ input on energy deals with Russia</title>
			<link>https://tribune.com.pk/story/2387898/minister-seeks-firms-input-on-energy-deals-with-russia</link>
			<comments>https://tribune.com.pk/story/2387898/minister-seeks-firms-input-on-energy-deals-with-russia#comments</comments>
			<pubDate>Thu, 24 Nov 22 04:03:51 +0500</pubDate>
			<dc:creator>
				<![CDATA[Our Correspondent]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2387898</guid>
			<description>
				<![CDATA[Refineries in Pakistan have expressed their willingness to produce petroleum products from Russian crude oil]]>
			</description>
			<content:encoded>
				<![CDATA[A &ldquo;breakthrough&rdquo; between Pakistan and Russia on the projects agreed between the two countries in the energy sector is expected in December.

According to Express News, way has been paved for the import of petroleum products, crude oil and gas from Russia, as refineries in Pakistan have expressed their willingness to produce yields from the Russian crude oil.

In this regard, State Minister for Petroleum Dr Musadik Malik has sought suggestions from the petroleum companies for the strategic meeting. The petroleum firms have been directed to complete the paperwork and submit it in the session.

The meeting will mull over the objectives, goals, problems and financial benefits of the energy projects agreed with Russia.

During the Shanghai Cooperation Organisation summit in Uzbekistan in September, Premier Shehbaz Sharif was told by Russian President Vladimir Putin that pipeline gas supplies to Pakistan were possible since part of the infrastructure was already in place.

In the meeting, PM Shehbaz said that Pakistan was co&not;m&not;mitted to expanding co&not;op&not;eration with Russia acr&not;oss all areas of mutual benefit including food security, trade and investment, ene&not;rgy, defence and security.

According to sources, Pakistan will save more than $2 billion annually in case of the implementation of energy projects with Russia whereas buying petroleum products from Moscow would ease pressure on the foreign exchange reserves.

Earlier this month, Finance Minister Ishaq Dar had indicated that Pakistan overcame the United States&rsquo; opposition to the purchase of Russian oil and stressed that Islamabad intended to enter into the fuel import deal with Moscow on terms similar to those agreed by New Delhi.

The country&rsquo;s financial czar while addressing the PML-N workers in Dubai, said that the US had been told that Pakistan could purchase Russian oil because its neighbour India was doing the same.

In October Pakistan&#39;s Ambassador to Moscow Shafqat Ali Khan had revealed that Islamabad was also seeking liquified natural gas (LNG) supplies from Moscow.

While speaking to the Russian news agency TASS, the diplomat said the two countries were currently in talks over the matter and pipeline gas supplies could be the solution to Pakistan&rsquo;s rapidly-increasing energy shortage.

That being said, due to the lack of necessary infrastructure for pipeline gas supplies, Pakistan is currently focusing on its &ldquo;immediate needs&rdquo; related to LNG.

&quot;We have established contact with the Russian side, and we are, of course, very much interested in the procurement of LNG. But that will come later. Our immediate need is for LNG,&rdquo; he said.

He added that an agreement on LNG supplies has yet to be reached with Russia. &quot;We have just established contact on this.&quot;

Due to the surge in global LNG prices, Pakistan&rsquo;s energy security troubles have been fueled drastically, which in turn has heightened the economic woes for the country.

Pakistan also currently has no long-term LNG supplier with spare supply in the market also fast diminishing owing to the increase in demand from the European Union.]]>
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			<title>SSGC seeks tariff increase of Rs667 per mmbtu</title>
			<link>https://tribune.com.pk/story/2387530/ssgc-seeks-tariff-increase-of-rs667-per-mmbtu</link>
			<comments>https://tribune.com.pk/story/2387530/ssgc-seeks-tariff-increase-of-rs667-per-mmbtu#comments</comments>
			<pubDate>Mon, 21 Nov 22 21:06:39 +0500</pubDate>
			<dc:creator>
				<![CDATA[Our Correspondent]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2387530</guid>
			<description>
				<![CDATA[Public gas utility projects revenue shortfall of Rs184.88 billion]]>
			</description>
			<content:encoded>
				<![CDATA[Sui Southern Gas Company (SSGC) has sought a massive increase of Rs667.44 per million British thermal units (mmbtu) in gas prices for financial year 2022-23.

The Oil and Gas Regulatory Authority (Ogra) held a public hearing on Monday to seek the input of relevant stakeholders before reaching a final decision.

In a statement, Ogra said &ldquo;it conducted a public hearing in Karachi to seek the point of view of consumers, the general public and stakeholders on the review petition filed by SSGC under Section 8(2) of the Oil and Gas Regulatory Authority Ordinance 2002 read with Rule 4(3) of the Natural Gas Tariff Rules 2002 for the review of its estimated revenue requirement/ prescribed prices for FY 2022-23&rdquo;.

In the petition, SSGC has projected a shortfall of Rs184,881 million in its revenue requirement, including Rs33,787 million on account of unrecovered shortfall for FY 2021-22. Accordingly, the public gas utility is seeking an increase of Rs667.44 per mmbtu in its average prescribed price for FY23.

Apart from that, the petitioner has estimated re-gasified liquefied natural gas (RLNG) service cost at Rs26.23 per unit for FY23.

Ogra conducted the hearing to provide an opportunity to all stakeholders and consumers, including the Karachi Chamber of Commerce and Industry and the All Pakistan Textile Processing Mills Association (APTPMA), to express their concerns over the SSGC petition.

Ogra chairman presided over the proceedings and reserved the decision, which would be announced within due course of time.

SSGC filed the review petition pertaining to changes in the wellhead gas prices and estimates of gas offtake.

In the petition, SSGC took additional amounts for flood rehabilitation and repair work of Rs200 million and Rs350 million on the transmission and distribution network respectively.

SSGC said that the Economic Update and Outlook of September 2022, released by the Finance Division&rsquo;s Economic Advisory Wing, put the inflation measured by the Consumer Price Index (CPI) at 26.1% for July-August FY23 compared to 8.4% in the same period of last year.

The estimate of the cost of gas has been revised considering the average crude oil and high sulphur fuel oil (HSFO) prices of $99.96 per barrel and $505.44 per ton respectively. The exchange rate parity has been taken at an average of Rs231 per dollar for the year. These assumptions have also been adopted for purchases, sales and unaccounted for gas (UFG).

In the revised petition, actual gas sales volumes for two months have been incorporated into the revised estimates and determined figures for the remaining 10 months have been kept.

In addition, the UFG volume has been maintained at the level of estimated revenue requirement of FY23.

This also includes prior year&rsquo;s shortfall recovery of Rs33,787 million, or Rs121.97 per mmbtu, (for natural gas consumers) and Rs15,518 million, or Rs33.58 per mmbtu, (for RLNG consumers). Ogra, in its decision taken earlier, had allowed a shortfall of Rs87,326 million, or Rs308.53 per unit, for the local gas.

However, due to the ring-fencing mechanism of RLNG business, it determined only the RLNG service cost (transportation component) at Rs9,313 million, or Rs20.15, per unit. Being the aggrieved party in certain issues, SSGC filed a motion for review on July 1, 2022 and claimed a revenue shortfall of Rs152,312 million, or Rs538.13 per unit, inclusive an FY22 shortfall recovery of Rs33,787 million, or Rs119.37 per unit, for natural gas consumers and Rs21,700 million, or Rs46.96 per unit, for RLNG consumers.

SSGC also requested Ogra to allow some items claimed in the instant petition to mitigate the possibility of further accumulation of gas development surcharge (GDS), which has been accumulated to the tune of Rs178 billion (as of June 30, 2020).

&nbsp;

Published in The Express Tribune, November 22nd, 2022.

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			<title>Qatar signs 27-year LNG deal with China</title>
			<link>https://tribune.com.pk/story/2387532/qatar-signs-27-year-lng-deal-with-china</link>
			<comments>https://tribune.com.pk/story/2387532/qatar-signs-27-year-lng-deal-with-china#comments</comments>
			<pubDate>Mon, 21 Nov 22 21:07:42 +0500</pubDate>
			<dc:creator>
				<![CDATA[reuters]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2387532</guid>
			<description>
				<![CDATA[It includes six LNG trains to ramp up Qatar’s liquefaction capacity to 126 million tonnes per year by 2027]]>
			</description>
			<content:encoded>
				<![CDATA[QatarEnergy has signed a 27-year deal to supply China&rsquo;s Sinopec with liquefied natural gas (LNG), the longest such LNG agreement so far as volatile markets drive buyers to seek long-term deals.

Following Russia&rsquo;s invasion of Ukraine in February, competition for LNG has become intense, with Europe in particular needing vast amounts to help replace Russian pipeline gas that used to make up almost 40% of the continent&rsquo;s imports.

&ldquo;Today is an important milestone for the first sales and purchase agreement (SPA) for North Field East project, it is 4 million tonnes for 27 years to Sinopec of China,&rdquo; QatarEnergy Chief Saad al-Kaabi told Reuters in Doha, shortly before the deal signing.

&ldquo;It signifies long-term deals are here and important for both seller and buyer,&rdquo; he said, adding that the deal was the LNG sector&rsquo;s largest single sales and purchase agreement on record.

The North Field is part of the world&rsquo;s biggest gas field that Qatar shares with Iran, which calls its share South Pars.

Published in The Express Tribune, November 22nd, 2022.

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			<title>LNG imports at high prices cause Rs10b loss</title>
			<link>https://tribune.com.pk/story/2387242/lng-imports-at-high-prices-cause-rs10b-loss</link>
			<comments>https://tribune.com.pk/story/2387242/lng-imports-at-high-prices-cause-rs10b-loss#comments</comments>
			<pubDate>Sat, 19 Nov 22 21:11:15 +0500</pubDate>
			<dc:creator>
				<![CDATA[Zafar Bhutta]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2387242</guid>
			<description>
				<![CDATA[Auditors find mismanagement in purchase of spot LNG cargoes]]>
			</description>
			<content:encoded>
				<![CDATA[Pakistan has borne a loss of over Rs10 billion due to mismanagement in the import of liquefied natural gas (LNG) cargoes that led to the purchase of expensive fuel, noted the Auditor General of Pakistan in its report.

According to Rule 4 of the Public Procurement Regulatory Authority (PPRA) Rules 2004, procuring agencies, while engaging in procurements, shall ensure that the procurements are conducted in a fair and transparent manner, the object of procurement brings value for money and the procurement process is efficient and economical.

During the audit of Pakistan LNG Limited (PLL) accounts for financial year 2020-21, the auditors observed that the management awarded spot cargo contracts at higher prices for delivery in July, September and October 2021.

PLL management floated two tenders on May 21 and June 5, 2021 for the spot purchase of LNG and delivery in July 2021. According to the bid evaluation reports dated June 2 and June 8, 2021, Trafigura and Vitol Bahrain offered prices of $11.7747, $11.6612 and $12.7777 per million British thermal units (mmbtu) for delivery windows of July 8-9 and July 12-13, 2021 respectively.

However, the PLL board of directors cancelled the bidding process, considering the price exorbitant that was predicted due to an unprecedented increase in the global LNG demand and the JKM (Japan Korea Maker) market benchmark.

In contrast with its earlier observation, the board reduced the lead time for LNG procurement.

In order to meet consumer demand, the management again floated two tenders on June 17 and June 24, 2021 and awarded contracts for spot cargoes to QP Trading and Vitol Bahrain at higher rates of $11.97 and $13.45 per mmbtu for the same delivery windows. It resulted in an excess cost of Rs983.215 million.

Similarly, a tender for the spot purchase of LNG and delivery in September was floated on June 19, 2021. According to the bid evaluation report dated July 6, 2021, Qatar Petroleum and Total Gas and Power quoted prices of $13.7875 and $14.6721 per mmbtu for the delivery windows of September 16-17 and September 26-27, 2021.

However, the PLL board cancelled the bidding process, considering the downward trend in LNG prices in the international market. In contrast with its earlier observation, it reduced the lead time for LNG procurement.

The management again floated a tender on July 20, 2021 and awarded spot cargo contracts to Gunvor Singapore and Petro China International at higher rates of $15.397 and $15.1988 per mmbtu for the same delivery windows. The revised tender resulted in an excess cost of Rs1,148.421 million.

Later, the PLL management floated a tender on June 19, 2021 for the spot purchase of LNG and its delivery in October 2021.

As per the bid evaluation report of July 6, 2021, Qatar Petroleum and BB Energy offered prices of $13.9875, $16 and $13.9875 per mmbtu for the delivery windows of October 8-9, 23-24 and 28-29. However, the board cancelled the bidding process, considering the falling LNG prices in the global market.

The tender was floated again on August 30, 2021 and contracts for spot cargoes were awarded to Vitol and Trafigura at higher rates of $19.8477, $20.2877 and $18.9966 per mmbtu for the same delivery windows. It resulted in an excess cost of Rs8,143.403 million.

Auditors were of view that the mismanagement in LNG procurement decisions led to an extra cost of Rs10.275 billion due to the less lead time and JKM forecast.

The matter was reported to the PLL management in October 2021 which, in its reply on December 29, 2021, stated that in accordance with the PPRA guidelines of accepting a single bid while ensuring the rate reasonability, the bids received for initial tenders for July 2021 could not be awarded.

However, it said, PLL was constrained to purchase those cargoes later owing to directives from the ministry to procure LNG to avoid expected energy shortage in the country.

Published in The Express Tribune, November 20th, 2022.

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&nbsp;]]>
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			<title>IHC to hear plea against Abbasi's indictment on 31st</title>
			<link>https://tribune.com.pk/story/2383862/ihc-to-hear-plea-against-abbasis-indictment-on-31st</link>
			<comments>https://tribune.com.pk/story/2383862/ihc-to-hear-plea-against-abbasis-indictment-on-31st#comments</comments>
			<pubDate>Sun, 30 Oct 22 04:41:25 +0500</pubDate>
			<dc:creator>
				<![CDATA[Our Correspondent]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category><category><![CDATA[Islamabad]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2383862</guid>
			<description>
				<![CDATA[Petitioner has requested court to direct accountability court to amend the indictment of the former prime minister]]>
			</description>
			<content:encoded>
				<![CDATA[The Islamabad High Court (IHC) has fixed for hearing a petition for amending the indictment of former premier Shahid Khaqan Abbasi in the LNG reference.

A division bench comprising Justice Mohsin Akhtar Kayani and Justice Tariq Mehmood Jahangiri will hear the application on October 31.

The petitioner has requested the court to direct the accountability court to amend the indictment of the former prime minister.

It also sought the provision of complete record of the LNG reference, besides dismissing the January 15, 2021 order of the trial court.

The petition highlighted that the court has sought the record of the case from the investigation officer.

An accountability court had issued a 26-page order to indict the former premier and others.

Abbasi has challenged the order through his lawyer, Barrister Zafarullah.]]>
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			<title>Pakistan in talks with Russia over import of LNG supplies</title>
			<link>https://tribune.com.pk/story/2382208/pakistan-in-talks-with-russia-over-import-of-lng-supplies</link>
			<comments>https://tribune.com.pk/story/2382208/pakistan-in-talks-with-russia-over-import-of-lng-supplies#comments</comments>
			<pubDate>Tue, 18 Oct 22 10:21:55 +0500</pubDate>
			<dc:creator>
				<![CDATA[News Desk]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2382208</guid>
			<description>
				<![CDATA[Pakistan's ambassador to Moscow says countries in talks, pipeline gas supplies could solve country's energy shortage]]>
			</description>
			<content:encoded>
				<![CDATA[Amid an energy shortage, Pakistan is reportedly seeking liquified natural gas (LNG) supplies from Russia, revealed Pakistan&#39;s Ambassador to Moscow Shafqat Ali Khan on Monday.

While speaking to the Russian news agency TASS, the diplomat said the two countries were currently in talks over the matter and pipeline gas supplies could be the solution to Pakistan&rsquo;s rapidly-increasing energy shortage.

That being said, due to the lack of necessary infrastructure for pipeline gas supplies, Pakistan is currently focusing on its &ldquo;immediate needs&rdquo; related to LNG.

Read License to sell gas to private sector sought

&quot;We have established contact with the Russian side, and we are, of course, very much interested in the procurement of LNG. But that will come later. Our immediate need is for LNG,&rdquo; he said.

He added that an agreement on LNG supplies has yet to be reached with Russia. &quot;We have just established contact on this,&quot; he said.

Due to the surge in global LNG prices, Pakistan&rsquo;s energy security troubles have been fueled drastically, which in turn has heightened the economic woes for the country.

Pakistan also currently has no long-term LNG supplier with spare supply in the market also fast diminishing owing to the increase in demand from the European Union.

With that in mind, he highlighted that Pakistan was calling for international focus to be shifted towards the gas issue.

Read more Poorer nations like Pakistan pay the price for EU&rsquo;s scramble for gas

&quot;If the rich countries take away all the LNG, what is going to happen to us? The global energy market needs to be stabilized. You know sanctions are impacting us very badly,&quot; he said.

Moreover, Khan added the sanctions placed by the West will not come in the way of the economic relations between Islamabad and Moscow.

&ldquo;We will try to bypass sanctions where they create problems,&rdquo; said Khan.

Speaking about whether or not Pakistan would consider buying gas from Russia through Iran - given Moscow and Tehran reached an agreement on swapping gas supplies - the ambassador said: &quot;I am not an expert in this, but any such ideas will be welcome for us to study.&quot;]]>
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			<title>Gas crisis lands LNG cargo market in hands of energy giants</title>
			<link>https://tribune.com.pk/story/2378850/gas-crisis-lands-lng-cargo-market-in-hands-of-energy-giants</link>
			<comments>https://tribune.com.pk/story/2378850/gas-crisis-lands-lng-cargo-market-in-hands-of-energy-giants#comments</comments>
			<pubDate>Tue, 27 Sep 22 11:00:30 +0500</pubDate>
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				<![CDATA[Reuters]]>
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			<category><![CDATA[World]]></category>
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				<![CDATA[This grip is not expected to ease until 2026 when more LNG starts to materialise and lower prices]]>
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				<![CDATA[Rocketing LNG cargo prices have squeezed out dozens of smaller traders, concentrating the business in the hands of a handful of international energy majors and top global trading houses.

This grip is not expected to ease until 2026 when more liquefied natural gas (LNG) starts to materialise and lower prices, adding to supply worries for poorer states reliant on it to generate power and driving up costs for big Asia economies.

The capital needed to trade the market soared after benchmark LNG prices rose from record lows below $2 per million British thermal units (MMBtu) in 2020 to highs of $57 in August.

In July, Japan&#39;s Nippon Steel Corp, the world&#39;s second-largest steelmaker (5401.T), purchased an LNG shipment at $41/MMBtu. LNG spot prices price stood at $40.50/MMBtu then.

Prices have recently eased, hitting $38/MMBtu on Monday, but analysts say they remain at levels that can be linked with an ongoing energy crisis

&quot;The biggest challenge facing every market participant right now is credit,&quot; said Ben Sutton, CEO of Six One Commodities, a U.S.-based LNG merchant that had to scale down operations after prices soared in the third quarter of 2021.

Short term market volatility has heightened risk for traders, with geopolitics rather than fundamentals driving price moves.

&quot;The ballooning of LNG cargo values, along with the spike in volatility, has ... put quite a strain on those players operating with smaller balance sheets,&quot; said Tamir Druz, managing director of Capra Energy, an LNG consultancy.

In Asia, a trading executive told Reuters some smaller players had left offices &quot;dormant&quot; in Singapore&#39;s trading hub, while second-tier Chinese traders and some Korean firms scaled down activity due as finance became harder to secure.

&quot;LNG has gone back to be the commodity of the rich,&quot; Pablo Galante Escobar, Global Head of LNG at energy trader Vitol, told this month&#39;s international Gastech conference in Milan.

&#39;HIGHER AND LONGER&#39;

Conditions are now heavily skewed in favour of players with large, diversified portfolios and strong balance sheets like oil majors Shell (SHEL.L), BP (BP.L) and TotalEnergies along with major trading houses including Vitol, Trafigura, Gunvor, and Glencore (GLEN.L).

BP, Shell, Trafigura and Glencore declined to comment. TotalEnergies, Vitol, and Gunvor did not immediately respond to Reuters request for comment.

Shell and TotalEnergies are estimated to have a combined portfolio of 110 million tonnes of today&#39;s 400 million tonnes (MT) LNG market, global head of business intelligence at energy and shipping consultancy Poten &amp; Partners Jason Feer said.

Both have built portfolios, with Shell buying BG and TotalEnergies taking on Engie&#39;s LNG arm. Both are also partnering in Qatar&#39;s North Field, one of the biggest LNG projects. 

Adding in Qatar Energy&#39;s portfolio of 70 million tonnes and BP&#39;s, which is estimated at around 30 million, means that four players account for more than half of the market.

While rising interest rates are adding to trading costs, these have not yet troubled big players, for whom increased price pressure represents a sweet spot, industry sources said.

Shell and TotalEnergies have reported record-breaking profit, while Vitol&#39;s record first half 2022 profit exceeded its results for the whole of 2021. 

Guy Broggi, an independent LNG consultant said Shell and TotalEnergies were major winners as partners and off takers at Egyptian plants at Damietta and Idku, along with BP and Italy&#39;s ENI, selling LNG far above the government&#39;s target price of $5/MMBtu.

As buyers of U.S. LNG via long term contracts, Shell and TotalEnergies also made massive gains from reselling low priced U.S. cargoes to higher priced European markets, he said.

&quot;We are entering unchartered territory as far as LNG markets are concerned and the aftermath of the current crisis with Russia is hard to fathom- not only for LNG. One sure thing is prices are here to stay higher and longer,&quot; Broggi said.

&#39;DIFFICULT TO COMPETE&#39;

High LNG cargo prices are also widening energy poverty globally as some cargoes, initially destined for poorer nations, end up being diverted to European buyers. 

&quot;Pakistan and Bangladesh emerge as big losers as both had procurement strategies with high percentage of spot purchase and were left to face power crisis this year,&quot; said Felix Booth, head of LNG at data analytics firm Vortexa.

In July, Pakistan LNG Limited (PLL) received no bids in a tender to import 10 cargoes of LNG.

Indian oil ministry showed India paid 20% more on an annual basis for its July LNG imports, valued at $1.2 billion, while monthly import volumes slid further due to high spot prices.

&quot;Until we build more infrastructure and put more vessels in the water ... it is going to be difficult to compete with the well-established markets,&quot; Charlie Riedl, executive director for trade group the Centre for Liquefied Natural Gas (CLNG), said.

Slow project development and a possible return of China from of COVID-related curbs will keep prices elevated, Feer at Poten &amp; Partners said.

&quot;It could get worse if China comes back into the market in a big way. China has been out of the market this year because of lower demand due to its lockdowns and slower economic growth. That has allowed volume to flow to Europe,&quot; Feer added.]]>
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			<title>Pakistan to seek deferred payments for Qatari LNG</title>
			<link>https://tribune.com.pk/story/2361100/pakistan-to-seek-deferred-payments-for-qatari-lng</link>
			<comments>https://tribune.com.pk/story/2361100/pakistan-to-seek-deferred-payments-for-qatari-lng#comments</comments>
			<pubDate>Sat, 11 Jun 22 19:20:36 +0500</pubDate>
			<dc:creator>
				<![CDATA[Reuters]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category><category><![CDATA[Business]]></category>
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				<![CDATA[Miftah says government is also speaking to Doha about a new five-or 10-year LNG supply deal for three monthly cargos]]>
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				<![CDATA[Pakistan will seek a deferred payment plan for liquefied natural gas bought under long term deals with Qatar, Finance Minister Miftah Ismail said on Saturday, as country faces a balance of payments crisis and falling foreign exchange reserves.

&quot;We&#39;ve talked about a deferred payment plan ... or at least I&#39;ve requested this ... and (Pakistan&#39;s) petroleum minister is doing negotiations and is going to do the talks,&quot; Miftah told Reuters in an interview.

Global energy prices have risen to record levels in recent months amid reduced Russian supply and resurgent demand in Asia.

Minister of State for Petroleum Musadik Malik, who was in Doha this week for talks with Qatari Minister of State for Energy Affairs and Qatar Energy chief executive Saad al-Kaabi, confirmed talks but said his government was exploring different &quot;innovative&quot; pricing and supply strategies in broad-based talks.

&quot;Deferred payment obviously would be enormously beneficial for Pakistan in the way of cash flows, but that is not the only discussion that we are having,&quot; Malik said in an audio message, describing the discussions as &quot;preliminary&quot;.

Qatar&#39;s government did not immediately respond to a request for comment.

Term contracts

In recent years Pakistan has increased reliance on LNG for electricity generation, but is facing widespread power outrages as procurement of the chilled fuel remains unreliable and expensive.

Miftah said his government was also speaking to Qatar about a new five- or 10-year LNG supply deal for three monthly cargos, as well as an additional cargo under an existing deal.

Pakistan already has two long term supply deals with Qatar - the first signed in 2016 for five cargoes a month, and the second in 2021, under which Pakistan currently gets three monthly shipments.

Malik said Qatar was among multiple suppliers Pakistan was talking to for term contracts as it tries to navigate a &quot;hot&quot; and &quot;pricy&quot; market.

Pakistan has unsuccessfully tapped the spot market for an extra July cargo, with two tenders over the last week not returning valid bids.

Miftah said two other long-term suppliers had been unable to fulfil contractual supply obligations to Pakistan.]]>
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			<title>Hike in gas rates echoes in NA</title>
			<link>https://tribune.com.pk/story/2360890/hike-in-gas-rates-echoes-in-na</link>
			<comments>https://tribune.com.pk/story/2360890/hike-in-gas-rates-echoes-in-na#comments</comments>
			<pubDate>Fri, 10 Jun 22 05:27:50 +0500</pubDate>
			<dc:creator>
				<![CDATA[Our Correspondent]]>
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			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2360890</guid>
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				<![CDATA[State minister tells lower house can’t give ‘false hope’ to people]]>
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				<![CDATA[Minister of State for Petroleum Musadik Malik on Thursday told the National Assembly that the government could not give people false hope to the people and lay pipelines without the provision of gas.

The state minister informed the House, presided over by NA Speaker Raja Pervez Ashraf, that the Sui Northern Gas Pipelines Limited (SNGPL) was providing around 800 to 850 mmcfd gas to its consumers.

However, he added that the households&rsquo; demand for gas went up to 900 to 950 mmcfd in winters.

Malik told the House that the demand could not be met from local reserves and the national treasury could not afford billions of rupees in subsidies.

&ldquo;If gas as per the requirement has to be met, its prices will have to be increased.&rdquo;

Speaking on a call-attention notice, Malik told the House that the ban on new gas connections and CNG stations was imposed by the previous government.

He further said 25 to 26% of gas was being supplied to domestic consumers and 17% to industries.

The state minister added that 18% gas was being supplied to the fertiliser sector and 32% to power plants.

He informed the House that LNG cost four times more than domestic gas.

Malik predicted that by 2030, the country would consume 76% of LNG and 24% of domestic gas.

He maintained that 99% of gas provided to consumers was subsidised.

He added that the supply of LNG to domestic consumers was subsidised by 92% to 97%.

&ldquo;A subsidy of Rs1.40 trillion on gas has been included in the circular debt.&rdquo;

Read&nbsp;Local company signs LNG agreement with Chinese firm

GDA member Saira Bano proposed to the speaker to declare Committee Room No 2 as the House.

She added that there were no members in the House and the quorum was always incomplete.

&ldquo;Members of the House are always moving around. At least members will sit in the committee room and remain in their seats,&rdquo; she added.

&ldquo;Now I am ashamed to point out the lack of quorum.&rdquo;

&nbsp;Speaking on other issues, Saira said Sindh was not receiving its share of gas.

The House also passed &ldquo;The Export-Import Bank of Pakistan Bill, 2022&rdquo; with a majority vote aimed at establishing a facility for the promotion of international trade.

The bill, moved by Minister of State for Finance and Revenue, Dr Aisha Ghaus Pasha, was passed by the lower house after clause by clause reading.

According to the statement of objectives and reasons, the government had taken several initiatives for the promotion and development of international trade as well as export oriented industries and import substitution in the national economic interest.

In continuation of its efforts and reforms, and in line with best international practices, the Pakistani government intends to establish the Export-Import Bank of Pakistan as the national export credit agency for the promotion, expansion and diversification of international trade.

It would help provide credit, guarantee and insurance products as well as ancillary services to exporters and importers, in the form of a statutory corporation that had the backing and support of the Pakistani government as is customary for export credit agencies to achieve their desired potential and objectives.

During the proceedings, the NA speaker announced with shock that MNA Aamir Liaquat had passed away. &ldquo;The proceedings of the House should be stopped immediately,&rdquo; he added.

The National Assembly session was adjourned till 5pm on Friday (today) over the demise of the MNA.

However, the National Assembly Secretariat later issued a notification that session would be held at 4pm.

(With input from APP)

&nbsp;]]>
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			<title>Going green: Punjab kilns try trading off firewood for LPG</title>
			<link>https://tribune.com.pk/story/2340135/going-green-punjab-kilns-try-trading-off-firewood-for-lpg</link>
			<comments>https://tribune.com.pk/story/2340135/going-green-punjab-kilns-try-trading-off-firewood-for-lpg#comments</comments>
			<pubDate>Sun, 23 Jan 22 20:28:34 +0500</pubDate>
			<dc:creator>
				<![CDATA[Asif Mehmood]]>
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			<category><![CDATA[Punjab]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2340135</guid>
			<description>
				<![CDATA[The switch is regarded as a pro-environment move that will also be more cost-effective for the brick industry]]>
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				<![CDATA[Following Punjab&rsquo;s successful switch from pollutant-heavy brick kilns to greener Zigzag kilns, the province is now experimenting with the use of liquefied petroleum gas (LPG) as a replacement for burning firewood.

It is expected that the tradeoff would not only reduce environmental pollution that comes with burning wood but would also prove to be more economical for kiln owners, saving millions in one season.

The new method has been experimentally applied to a brick kiln in the Kasur district, which like other traditional furnaces, had been relying on burning dry wood and coal to cook bricks. &ldquo;Temperature in a furnace needs to rise to 500 to 600 degrees to be able to cook bricks.

This means that up to 300 to 400 maunds of wood go into keeping a traditional furnace burning for a year. As wood becomes harder to procure and prices continue to climb, furnace owners are forced to spend upwards of Rs0.3 million to keep their kilns lit, which is really affecting the industry,&rdquo; Kiln Owners Association Secretary-General Mehr Abdul Haq, adding that his association has already switched to LPG with the help of The International Centre for Integrated Mountain Development (ICIMOD).

Read&nbsp;11 brick kilns, 27 stone crushing plants sealed

Per Haq, experts were called in from Nepal to train local kiln workers for the use of the new, greener fuel. &ldquo;Now, kilns which required an extortionate amount of wood run on eight to ten commercial size LPG cylinders, costing just Rs40,000 to Rs50,000 a year. The switch has proven to be more cost-effective and beneficial for the industry and the environment,&rdquo; he added.

Where the switch to Zigzag kilns has been hailed as an environmentally conscious move, for traditional kiln owners however it meant that they had to spend more on blowers to expedite the burning of coal. According to experts, the switch to LPG would also mean that kiln owners would no longer need to invest in blowers costing Rs500,000 to 600,000.

Rana Subhan, owner of a brick kiln in Lahore, says he and his fellow kiln owners have started noticing the benefit of replacing LPG with wood and are looking forward to adopting the greener fuel. &ldquo;This will not affect the price of bricks but will be cheaper to transport.

If the entire industry switches to LPG, the end of firewood-dependency would also mean that fewer trees have to be cut down, which could aid the problem of deforestation here,&rdquo; the kiln owner opined, advocating for the new fuel.

Speaking in the same vein, Environment Secretary Syed Mubashir Hussain also regarded the switch as a revolutionary move. He believes that adopting modern methods like the use of Zigzag kilns and greener fuel options can eliminate emissions like soot, which contribute majorly to the smog that clouds this city. &ldquo;In the future, we will also try to cut down on our dependency on fossil fuels and move towards renewable energy sources, like the rest of the developed world.

It will require the contribution of all our scientific, technical and managerial skills, but we are dedicated to the cause and think it is the only permanent solution for environmental degradation,&rdquo; he told The Express Tribune.

&nbsp;

Published in The Express Tribune, January 24th, 2022.]]>
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			<title>PM directs fast-track licence issuance for domestic gas exploration</title>
			<link>https://tribune.com.pk/story/2336204/pm-directs-fast-track-licence-issuance-for-domestic-gas-exploration</link>
			<comments>https://tribune.com.pk/story/2336204/pm-directs-fast-track-licence-issuance-for-domestic-gas-exploration#comments</comments>
			<pubDate>Wed, 29 Dec 21 13:47:00 +0500</pubDate>
			<dc:creator>
				<![CDATA[APP]]>
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			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2336204</guid>
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				<![CDATA[Imran orders unhindered installation of new LNG terminals in the country]]>
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				<![CDATA[In a bid to secure the cheapest source of natural gas, Prime Minister Imran Khan has directed the authorities concerned to fast-track issuance of licences for domestic gas exploration.

According to Prime Minister&rsquo;s Office Twitter handle, the premier chaired the high-level meeting to review the &ldquo;gas situation in Pakistan&rdquo;.

&ldquo;The meeting was briefed about the demand, supply from the domestic reserves, shortfall and Import of LNG,&rdquo; it added.

During the meeting, Prime Minister Imran directed the relevant departments to remove hurdles in the process of installing new Liquefied Natural Gas (LNG) terminals and virtual pipeline projects.

Underscoring the importance of the North-South Gas Pipeline, he directed officials to ensure its execution without further delay to complete it within the stipulated timeline.

Earlier, the participants of the meeting were apprised that the current constrained demand for gas in Pakistan is 4,700 mmcfd which increases to 6,000-6,500 mmcfd in winter.

They were told that the current domestic supply amounts to 3,300 mmcfd, which is decreasing every year. The resulting shortfall has to be managed by importing LNG.

With the current infrastructure, a shortfall of nearly 1,000 mmcfd in winter arises for which multiple options are being adopted.

Read More:&nbsp;Gas crisis to hit GDP growth

The meeting was further informed that for the short term, the existing capacity of domestic terminals is being optimised and the process of issuance of virtual pipeline licences is expedited.

In addition, the installation of two new LNG terminals is underway, with all bottlenecks being removed on a priority basis.

In this regard, the ministries of maritime affairs, petroleum, as well as Oil and Gas Regulatory Authority (Ogra) were directed to coordinate and also take all other stakeholders on board including investors.

The meeting was attended by federal ministers Shaukat Fayyaz Tarin, Hammad Azhar, Asad Umar, Ali Haider Zaidi, SAPM Mahmood Maulvi and officials of the relevant departments.

It is worth mentioning here that Pakistan is currently facing a shortage of gas for both industrial and domestic use. Earlier this month, Sui Southern Gas Company Limited (SSGCL) suspended gas for non-export general industries in compliance with the plan devised by the Ministry of Energy to manage gas reserves.

Separately, a local news outlet reported that one of Pakistan&rsquo;s LNG suppliers also informed the country that it would not be able to deliver the commodity, prompting fears of the gas crisis getting worse.]]>
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