12b lost as crucial LNG shipment cancelled

Published: December 8, 2018
A liquefied natural gas (LNG) tanker is tugged towards a thermal power station. PHOTO: FILE

A liquefied natural gas (LNG) tanker is tugged towards a thermal power station. PHOTO: FILE

ISLAMABAD: The Pakistan LNG Limited has cancelled a crucial shipment of the liquefied petroleum gas (LNG) that will not only cause a shortage of gas during winter – to the benefit of furnace oil mafia –  but will also cause a loss of Rs12 billion to  the national exchequer.

According to sources in the Petroleum Ministry, the Pakistan Petroleum Limited (PPL) told the Pakistan LNG Limited that the LNG is not needed for now and a new shipment should be sent in June 2019. The canceled shipment carried 130,000 metric ton LNG.

The source said this cancellation of LNG shipment will result in a loss of Rs12billion as the LNG will become expensive in June and delivery fee will also increase. Due to this delayed arrival, the LNG terminal company will have to pay $1 per MMBTU capacity charges.

Pakistan can import 9m tons of LNG per annum

The sources said the cancelled LNG vessel was supposed to be received by Pakistan at 11.38%. However, now the supplying company has sold that vessel at 17% in the European market.

They said cancellation of shipment will create an LNG shortage for industries in beginning of 2019. The PPL said the Sui Northern Gas Pipeline Limited (SNGPL) does not need the LNG shipment right now.

According to the ministry, the SNGPL needed two vessels of LNG due to requirement of industries in the winter. When the Petroleum Ministry was contacted for its official response on the LNG shipment cancellation, it said it was unaware of the development.

While addressing media a few days ago, the minister for petroleum has said the domestic users are the first priority for gas provision in winters and the power plants come next. Mixed LNG is being supplied to domestic users in areas of Punjab. In the current situation, RLNG will be supplied to the industries.

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