LNG importers: Better gas distribution network demanded
Member Gas Ogra Mansoor Muzaffar’s statement raises eyebrows.
ISLAMABAD:
Liquefied natural gas (LNG) importers have expressed concern over low pipeline capacity of gas utilities and asked the government to enhance their capacity for transportation of LNG to consumers.
Importers raised the issue in a meeting on Monday with the Oil and Gas Regulatory Authority (Ogra) on Third Party Access Rules 2011.
Third party access rules will allow LNG importers to use pipelines of gas utilities – Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipelines Limited (SNGPL) – for transportation of the fuel across the country.
Member Gas Ogra Mansoor Muzaffar’s statement that pipeline allocation would be given to the party that brings LNG first in the country, irked potential importers who have already spent millions of dollars.
Construction licence for LNG terminal has been granted to three companies – Pakistan Gas Port, Engro and Global Energy.
Muzaffar ruled out any favour to a selected LNG party and said that all stakeholders would be taken on board while formulating LNG Third Party Access Rules 2011.
He termed LNG import a viable option to overcome the energy crisis. The country is facing a gas shortage of 1.5 to 2 billion cubic feet per day (bcfd) that can be bridged by import of LNG, he said, adding “we have requested the federal government to notify LNG Policy 2011 so that LNG rules could be framed to allocate pipeline capacity of gas companies to LNG developers.”
He said that Ogra was following non-discriminative process to frame LNG rules and parties had been given 10 more days to furnish comments. “We plan to import LNG before next winter to tackle the energy crisis,” Muzaffar added.
Pakistan Gas Port is leading the project out of three companies as it has achieved financial close of $100 million, he said, adding that the federal government will give guidelines on tariff formula.
Former SSGC managing director Munawar Baseer, who is now associated with Pakistan Gas Port, said that LNG would be an alternative to diesel as it will cost between $20 and $24 per million British thermal unit (mmbtu).
The price of LNG in India was $14.9 per mmbtu on Sunday and its use in power sector would result in substantial savings, he said, adding that electricity would become cheaper and its impact would be passed on to the consumers.
Former petroleum secretary Farrukh Qayyum, representing Global Energy, said that LNG third party rules should not become hostage to any party. The country is facing a loss of $100 million per month due to delay in import of 500 million cubic feet (mmcf) of gas that amounts to over a billion dollars in losses per year, he added.
Ogra Chairman Sabir Hussain, in a post-meeting press conference, said that Sui Southern Gas Company had the capacity to transport 500 million cubic feet per day (mmcfd) of gas and additional capacity would be created to transport more LNG to the consumers.
Gas companies including SSGC and SNGPL have been directed to complete the capacity enhancement project as early as possible, Hussain added.
Published in The Express Tribune, October 18th, 2011.
Liquefied natural gas (LNG) importers have expressed concern over low pipeline capacity of gas utilities and asked the government to enhance their capacity for transportation of LNG to consumers.
Importers raised the issue in a meeting on Monday with the Oil and Gas Regulatory Authority (Ogra) on Third Party Access Rules 2011.
Third party access rules will allow LNG importers to use pipelines of gas utilities – Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipelines Limited (SNGPL) – for transportation of the fuel across the country.
Member Gas Ogra Mansoor Muzaffar’s statement that pipeline allocation would be given to the party that brings LNG first in the country, irked potential importers who have already spent millions of dollars.
Construction licence for LNG terminal has been granted to three companies – Pakistan Gas Port, Engro and Global Energy.
Muzaffar ruled out any favour to a selected LNG party and said that all stakeholders would be taken on board while formulating LNG Third Party Access Rules 2011.
He termed LNG import a viable option to overcome the energy crisis. The country is facing a gas shortage of 1.5 to 2 billion cubic feet per day (bcfd) that can be bridged by import of LNG, he said, adding “we have requested the federal government to notify LNG Policy 2011 so that LNG rules could be framed to allocate pipeline capacity of gas companies to LNG developers.”
He said that Ogra was following non-discriminative process to frame LNG rules and parties had been given 10 more days to furnish comments. “We plan to import LNG before next winter to tackle the energy crisis,” Muzaffar added.
Pakistan Gas Port is leading the project out of three companies as it has achieved financial close of $100 million, he said, adding that the federal government will give guidelines on tariff formula.
Former SSGC managing director Munawar Baseer, who is now associated with Pakistan Gas Port, said that LNG would be an alternative to diesel as it will cost between $20 and $24 per million British thermal unit (mmbtu).
The price of LNG in India was $14.9 per mmbtu on Sunday and its use in power sector would result in substantial savings, he said, adding that electricity would become cheaper and its impact would be passed on to the consumers.
Former petroleum secretary Farrukh Qayyum, representing Global Energy, said that LNG third party rules should not become hostage to any party. The country is facing a loss of $100 million per month due to delay in import of 500 million cubic feet (mmcf) of gas that amounts to over a billion dollars in losses per year, he added.
Ogra Chairman Sabir Hussain, in a post-meeting press conference, said that Sui Southern Gas Company had the capacity to transport 500 million cubic feet per day (mmcfd) of gas and additional capacity would be created to transport more LNG to the consumers.
Gas companies including SSGC and SNGPL have been directed to complete the capacity enhancement project as early as possible, Hussain added.
Published in The Express Tribune, October 18th, 2011.