Shell assessing possibility of supplying LNG to Pakistan

Also plans to open 15 additional outlets nationwide this year

KARACHI: Shell Exploration Company BV is assessing the possibility of supplying Liquefied Natural Gas (LNG) to Pakistan, as it keeps a vigilant eye on developments regarding construction of the second LNG import terminal in the country.

“At the moment, the possibility and options of providing LNG to Pakistan are being assessed,” Shell Pakistan told The Express Tribune.



Recently, Shell Exploration Company BV, Engro Corporation’s Elengy Terminal Limited and Pakarab Fertilizers Limited (a Fatima Group company) signed a joint cooperation agreement to assess the ‘development’ of a liquefied natural gas receiving and re-gasification terminal at Port Qasim, Karachi, it said.

“The three parties will continue work to assess the ‘technical and commercial’ feasibility of the fast-track project before moving it to the final investment decision (FID) to provide the cleanest fossil fuel to help meet the country’s growing energy demands,” it added.

Royal Dutch Shell remains an active trader of the gas internationally. Earlier, it qualified for a gas supply contract to Pakistan, but the contract was awarded to a Qatari company, which agreed to provide the commodity at a lower price.

The second LNG terminal, which is to have the capacity to import up to 600 million cubic feet of gas per day, is expected to become operational by June 2017. The first commercial vessel of the imported LNG may moor at the site by March 2018.



Deregulation

On a separate note, Jawwad Cheema, country chairman and managing director, said that deregulation of petroleum products’ pricing would help Shell the most among oil marketing companies.

“If deregulated, no one will play better than us,” he replied on the sidelines of the re-launch of a fuel station.



He believed that the government was gradually moving towards deregulating petroleum products, which would help the company earn better profit margins. “The government would deregulate the products segment-wise instead of overnight,” he said.

“In July 2016, the Government of Pakistan approved a small increase in regulated fuel margins for motor gasoline and diesel. However, comparing the unit margins in Pakistan with the available margins in the region, we continue to advocate for a further favourable revision, to bring them in line with increasing costs of doing business in Pakistan,” he said in a performance report of the company announced for half-year period ended June 30, 2016.

He said Shell Pakistan would continue its policy of opening more fuel outlets nationwide. It would open another 15 outlets this year. The company had 780 outlets as on December 31, 2015.

He said the company’s market share in all oil products decreased by 0.5% to 16%. However, the sales in volume terms continued to grow, as the size of the market was increasing at a rapid pace.



He said there are some 70 to 80 outlets in Karachi alone, while 20 of them carry potential to be revamped over a period of time.

Published in The Express Tribune, September 1^st, 2016.

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