Private firms to import LNG by April

SAPM informs ADB about progress on reforms in petroleum sector

ISLAMABAD:

Private companies will be able to bring and sell liquefied natural gas (LNG) to consumers of their choice by April this year, Special Assistant to Prime Minister on Petroleum Nadeem Babar told a delegation of the Asian Development Bank (ADB).

He said that Pakistan had fully implemented the third-party access policy in order to utilise the idle capacity of LNG terminals with the help of private companies.

In this regard, the cabinet on Tuesday approved the allocation of LNG terminal and pipeline capacity on a three-month rolling basis to the private sector for LNG import and marketing.

Earlier, the Cabinet Committee on Energy (CCOE) had approved the allocation of pipeline capacity for three months. It will be open for all sectors including the compressed natural gas (CNG) filling stations.

The Oil and Gas Regulatory Authority (Ogra) has already allowed the issuance of CNG station licences based on LNG supply following the opening of LNG market for the private sector.

At present, two LNG terminals are functioning. The CNG sector is receiving gas supplies from state-run gas companies. However, it wants to import LNG at competitive rates.

After approval of the cabinet, the LNG market will be open for the private sector, which will provide an opportunity for the consumers to bring gas at competitive prices.

Babar made the remarks at a virtual meeting on Tuesday with the ADB team in Manila together with ADB Country Director Xiaohong Yang and their energy team.

The meeting was aimed at discussing progress on the reform programme in the petroleum sector of Pakistan. Energy sector reforms are part of the government’s policy to improve energy economics and secure oil and gas supplies across the country.

In his opening remarks, the SAPM said that the government had made significant progress on every aspect of energy reforms despite the challenges posed by the Covid-19 pandemic.

Babar told ADB officials that the third-party access (TPA) policy had been fully implemented, adding that TPA was also available for pipelines and the government had advertised the unutilised capacity of terminals to enable private companies to bring and sell LNG to consumers of their own choice by April 2021.

Talking about exploration and production (E&P) activities, the SAPM said that the first bidding round for 15 onshore oil and gas blocks had been completed.

He said that the minimum investment to be made by E&P companies in conducting studies and examination of the blocks would be around $71 million over three years.

It would be followed by investment running into hundreds of millions of dollars in the development programme in areas close to the oil and gas blocks. He voiced hope that the second and third rounds of bidding would be completed by the end of current year.

The SAPM pointed out that the government had prepared a regulatory framework for the upstream petroleum sector and it would be put in place after approval by the Council of Common Interests (CCI) and necessary legislation.

Talking about unaccounted for gas (UFG), Babar said that both Sui companies had made significant progress on the UFG reduction plan.

The SAPM appreciated the ADB support for hiring a consultant and the study on establishing strategic underground gas storages.

He underlined the importance of underground gas storage facilities, saying that the project would enhance the country’s capability to import gas and ensure sustainable economic growth.

Also speaking on the occasion, the ADB country director lauded efforts of the government of Pakistan for bringing reforms to the energy sector. She expressed hope that the bank would continue cooperation in the field of energy.

Published in The Express Tribune, February 10^th, 2021.

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