Business

Pakistan trying to ink fresh LNG deals at lower rates

These are expected to save billions of rupees for the country

Our Correspondent June 20, 2018

Pakistan is expected to save more than $2 billion annually through more efficient power generation at 62% efficiency with a lower tariff of Rs7-8 per kilowatt-hour. PHOTO: FILE

ISLAMABAD: Liquefied natural gas (LNG) imports have been called a game changer for Pakistan’s economy and plans are under way to make more long-term supply arrangements through government-to-government deals and tenders.

Pakistan LNG Limited (PLL), which deals with gas imports, is voicing hope that in future deals, prices will come down, leading to savings of billions of rupees. At present, Pakistan State Oil (PSO) is importing six LNG cargoes per month whereas PLL has also been allowed to bring six more cargoes based on demand from power producers or Sui Northern Gas Pipelines.

ECC puts off decision on higher LNG import margins

So far, PLL has struck mid- to long-term contracts for two LNG cargoes per month and is in the process of booking the remaining four cargoes.

Talking to The Express Tribune, a senior government official said efforts were under way to enter into deals at old or better prices which may save $300-400 million annually or $3.5-4 billion over the next decade in oil imports as well as bring down average LNG prices in Pakistan.

K-Electric expects lower tariff after LNG use in plants

According to officials, as LNG has replaced furnace oil in power plants, Pakistan is expected to save more than $2 billion annually through more efficient power generation at 62% efficiency with a lower tariff of Rs7-8 per kilowatt-hour.

They said Pakistan’s fertiliser industry had also got a boost from LNG supplies as it had got an exportable surplus compared to imports worth billions of dollars earlier. Apart from this industry, most of the closed textile units and compressed natural gas (CNG) stations are also back on line.

Incurring Losses: LNG plants fail to start on time

Now, according to officials, the Ministry of Energy is pushing ahead with a plan to merge PLL and Pakistan LNG Terminals Limited - the former will deal with the supply chain and the latter will handle matters pertaining to LNG terminals. A meeting in this regard will be held soon.

According to an analysis done by the two companies, their merger will save Rs1-2 billion annually through more efficient human resources, financial, credit and operational management.

Published in The Express Tribune, June 20^th, 2018.

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