LNG import is one of the viable options for the country in these times of acute energy shortages. PHOTO: FILE
Pakistan has failed to seize a chance to import cheaper liquefied natural gas (LNG) from the United States and any deal struck now will take years to bring first supplies.
A delegation of Pakistan officials, which visited Washington recently, came to know that the US had struck LNG supply deals with seven to eight countries including India, China, South Korea and Japan and 25 other applications were pending.
“Pakistan has not even applied for LNG import, so it could not be able to bring gas from the US before 2030 if all pending applications are entertained by US authorities,” a delegation member told The Express Tribune.
LNG import is one of the viable options for the country in these times of acute energy shortages.
The US has been pressing Pakistan to shelve the Iran-Pakistan (IP) gas pipeline project and shift focus to Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline, but it is unlikely to be laid because of the precarious security situation in Afghanistan.
Insiders believe that the IP gas pipeline, though at an advanced stage of implementation, could also become a dream following the grant of $1.5 billion by Saudi Arabia to Pakistan.
“The only option left with the government is to go for LNG import, but it is only interested in supplies from Qatar, which has quoted a high price of over $18 per million British thermal units (mmbtu), close to the price of furnace oil,” an official said. “The US has entered into LNG supply deals at around $10 per mmbtu.”
The price quoted for Iranian and Turkmenistan gas is in the range of $11 to $13 per mmbtu.
The government had missed an opportunity to import cheaper LNG from Qatar in the past while India booked supplies in 2004, the official said, adding the same had happened in the case of US, which would become the largest LNG exporter in the future.
The Planning Commission (PC) suggested in its report in January 2012 that the country should consider LNG purchase at prices indexed to the US Henry Hub (target price under $10 per mmbtu). It should ensure imports from the US and make spot purchases, the PC said.
However, nothing was done and even the government did not apply for LNG import while other countries clinched deals.
The delegation, which visited the US, comprised officials of the Ministry of Petroleum and Natural Resources, Oil and Gas Regulatory Authority (Ogra) and gas companies, who went to the trip to see how LNG supplies were handled. US officials took the delegation to export terminals and they were also briefed about LNG trade with different countries.
According to the official, the US energy regulator has allowed export of two billion cubic feet of LNG per day, but the energy ministry has sought an increase in the export quota.
The regulator will first assess the domestic market to keep prices low and then take a decision on enhancing exports.
Published in The Express Tribune, March 26th, 2014.
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@Azer Mustaqeem: There are several LNG projects in Canada but the PETRONAS consortium is at the most advanced stage.It already has offtake partners with the last deal signed with India.its booked for full capacity with indian,japanese and Korean partners.no chance there. Mozambique is also a lost opportunity though that and Canadian ones our state oil or gas companies need a shareholding in the LNG project in order to get a percentage of output from the project and our local oil and gas companies are more engaged in conventional oil and gas drilling locally
Why not Canada? Canada is also planning many LNG export terminals and have almost the same cost as US, if not cheaper. Petronas (Malaysian National Oil Company) is building one of the LNG terminal and is looking for long term contracts. In a year or so when the Pakistan government will wake up, this will be too late as well. I guess we missed Mozambique already.
US is responsible for the vast majority of Pakistan's internal problems since 2007. In all fairness, the US should be held responsible. LNG export and mango/produce import deals are a right Pakistan has over the US. The fact that the US is ignoring Pakistan's needs and putting pressure on countries not to deal with Pakistan will be remembered for years.
US doesnt export gas but it will do so as LNG by 2018.there are 8 projects that have recieved approval by the state department and another 25 in the pipeline.Most of the capacity has alreayd been booked by European and asian buyers with investments in LNG infrastructure as well.
Pakistan is in terrible situation because by accepting saudi grant they will try to avoid IP project and if they do so then iran will levy huge penalty but i m sure pakistan will play US card and say that they are delaying just because of threat of US sanction but iran will be at huge loss as they have already laid pipeline on their side and will not able to digest it so lets watch out.
That tells you how unpopular the USA is -- wont' even buy their gas at discount price. I suppose paying premium price from Islamic source made sense to someone - maybe you should figure out who and replace him with someone who makes decision using logic rather than emotion?