Energy solutions: LNG import a game changer, to save $2.5b in oil imports

Published: September 16, 2014
LNG price would depend on market forces and the Oil and Gas Regulatory Authority (Ogra) has no role in that regard. PHOTO: STOCK IMAGE

LNG price would depend on market forces and the Oil and Gas Regulatory Authority (Ogra) has no role in that regard. PHOTO: STOCK IMAGE


Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi has said that consumption of liquefied natural gas (LNG) in the compressed natural gas (CNG) industry will prove to be a game changer as it will save $2.5 billion per annum in oil imports and ensure employment to about one million people.

Speaking at a press conference along with All Pakistan CNG Association supreme council Chairman Ghayas Paracha here on Monday, Abbasi said gas utilities – Sui Northern Gas Pipelines Limited and Sui Southern Gas Company – would provide infrastructure for transporting 500 million cubic feet of LNG per day (mmcfd) to CNG filling stations.

“Gas supply to CNG stations will be for seven days a week and CNG will be 30% to 35% cheaper than petrol,” he said, stressing Pakistan had a wide infrastructure network in place for CNG pumps and provision of LNG would lead to consumption of clean energy in the country.

He pointed out that CNG stations had provided jobs to 500,000 to 700,000 people and the number would go up to one million following revival of the industry on the back of LNG injection.

“The private sector will import LNG worth billions of dollars and 250 to 300 mmcfd will be left after its supply to CNG stations. This saved gas will be provided to power or fertiliser plants,” he said.

The private sector would also bear the impact of unaccounted-for-gas (UFG), he added, referring to gas theft and leakage.

The country can transport 500 mmcfd of LNG by using the current transmission infrastructure of gas utilities, but additional infrastructure will be developed to handle more LNG supplies.

The minister made it clear that LNG price would depend on market forces, ruling out any role for the Oil and Gas Regulatory Authority (Ogra) in that regard.

However, he said, it would be 30% to 35% cheaper than petrol and the government would give tax relief to make it affordable for the consumers. It will take 18 months to induct LNG into the CNG industry.

Blaming long marches by two political parties for having a negative impact on foreign investment, he expressed the hope that the issue would be resolved and foreign capital would continue to land in the oil and gas sector.

The long marchers were creating a negative perception about LNG price, which the government had not yet finalised with any party, he said, adding he had written a letter to parliamentary leaders including Sheikh Rasheed, asking them to bring any party with LNG supply offer at a cheaper rate. But nobody has responded.

Abbasi pointed out that construction of an LNG terminal had got under way after past governments failed for five times, adding they were following a transparent process.

All Pakistan CNG Association Chairman Ghayas Paracha claimed that the CNG industry’s worth would jump from Rs450 billion to Rs600 billion after LNG supply to the filling stations.

“The number of CNG-powered vehicles will reach 4.5 million compared to existing 3.7 million and consumers will be able to save Rs12,000 per month in the wake of continuous LNG supply,” he said.

Published in The Express Tribune, September 16th, 2014.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.

Facebook Conversations

Reader Comments (5)

  • imran
    Sep 16, 2014 - 3:19AM

    LNG is long term nawaz game!!!


  • ASIM
    Sep 16, 2014 - 10:00AM

    LNG project is similar to one done by PPP in 1993 i.e 29 IPP’s producing expensive electricity at rate of 22 RS per unit. PMLN decided LNG import from qatar which would cost the nation 100 billion dollars in 15 years extra compared to rate offered by Iran and Russia.

    3- LNG terminals are planned to be built in the country at a cost of around 03-05 billion dollars? These terminals are useless and wastage of money if gas is taken from Iran. The Iran Pakistan gas pipeline costs much less compared to spent on these terminals. China is already dismantling these terminals due to availability of cheap natural gas.

    Oman concluded 01 billion dollars deal to built gas pipe line with Iran.

    ..India has plans getting gas through sea from Iran.

    Europe is the next as they discontinued gas import from Russia.

    Why the corrupt leaders serving not importing gas from Iran?

    LNG is a lolypop to the nation and not game changer its show off ; if they get gas from Iran CNG would cost 10 RS instead of the existing 76 RS per kg


  • unbelievable
    Sep 16, 2014 - 9:19PM

    However, he said, it would be 30% to
    35% cheaper than petrol and the
    government would give tax relief to
    make it affordable for the consumers

    In case you didn’t know it – your broke and govt can no longer afford to provide subsidies for energy or anything else. Your not like your oil rich neighbors – your like most in this World who have to charge consumers based on what things cost.


  • syed hussain jafri
    Sep 17, 2014 - 1:06AM

    infact it is not big game changer it’s great plan to earn billions n left the people suffer can some body clear who will open LCs n who’s account UGDC illegally incorporated company registered just one year before without the approval of their members or in otherwords stake holders all the directors have link in government n representation no one can proof.
    main thing is important out of $ 16 who will share $ 5 kick back since india already getting LNG for $ 11.
    Blue eyed please spare poor people of Pakistan go for Iran gas pipeline instead of playing Big Games.
    S H Jafri


  • Mohsin
    Oct 19, 2014 - 1:46PM

    We cannot continue the Iran pipeline because of US and EU sanctions. Why do you guys have to get emotional without thinking?


More in Business