OGRA grants licences to two virtual pipeline firms

Private sector to introduce this concept through cryogenic bowzers

ISLAMABAD:

In a new development, Pakistan’s private sector is going to introduce an innovative concept of virtual pipelines through cryogenic bowzers.

Currently, Pakistan has two floating liquefied natural gas (LNG) terminals in Karachi with handling capacity of around 1.3 billion cubic feet per day (bcfd) of LNG.

With the new concept of virtual pipelines, the government will open up the LNG market for the private sector to ship gas through such pipelines. Under this project, the private sector will not have to lay pipelines for gas transport.

In a move towards gas market liberalisation, promotion of competition in the gas market, boosting country’s economic growth and ensuring reliable energy supply to the consumers of natural gas, the Oil and Gas Regulatory Authority (Ogra) has granted “provisional licences” to two virtual pipeline companies.

These will enable and facilitate them in completing all formalities under the provisions of Ogra Ordinance 2002, LNG Policy 2011 and LNG Rules 2007 and then apply for a licence for carrying out regulated activities.

LNG Easy (Private) Limited and Daewoo Gas (Private) Limited shall pursue the LNG virtual pipeline project for gas supply through cryogenic bowzers.

They are planning to use a berth at Karachi Port and another at Gwadar Port respectively for the import of LNG cargoes, and to fill, transport, market and distribute LNG under the “Integrated LNG Project Structure” as per Article 2(a) of the LNG Policy 2011.

These will be the first projects in Pakistan and facilitate supply of natural gas mainly to off-grid consumers, hence, pushing up national growth.

In addition to the two companies, Gwadar GasPort Limited (GGPL), a joint venture formed by Pakistan GasPort Limited, Al-Qasim Gas and Jamshoro Joint Venture Limited, is also interested in bringing LNG through virtual pipelines.

GGPL has already inked an agreement last month with Gwadar International Terminals Limited to move LNG onto special purpose trucks for regasification at various industrial sites across the country.

GGPL will start engineering work at the existing berth 3 at Gwadar Port for LNG shipment from a floating storage unit to trucks for transport to compressed natural gas (CNG) stations, textile mills, fertiliser plants and other such large commercial and industrial units across the country.

At present, state-run gas utilities have complete control over import, sale and marketing of LNG in the country.

The private sector had been seeking idle capacity of LNG terminals and pipelines owned by the gas utilities, which discouraged the entry of private sector in the LNG market. This is despite the fact that the consumers are forced to utilise expensive gas due to lack of competition.

The current government is focusing on creating competition in the gas market to provide affordable gas to the consumers.