Seeing a handsome opportunity to cash in on Pakistan’s growing energy appetite, state-owned energy companies of Brunei Darussalam and China have offered multibillion-dollar deals for the supply of liquefied natural gas (LNG) in a government-to-government contract.
Separately, Pakistan is close to sealing an LNG import agreement with gas-rich Qatar to bridge the widening gap between demand and supply of energy.
According to officials familiar with the development, PB Trading Sendirian Berhad, a wholly-owned subsidiary of Brunei National Petroleum Company Sendirian Berhad also known as Petroleum Brunei, a national oil company, and Petro China, one of China’s largest petroleum companies, have expressed interest in exporting LNG to Pakistan.
In addition to these, officials said, Pakistan would explore the possibility of importing LNG from countries like Australia, Nigeria, Indonesia, Algeria, Russia and Oman, which are exporting gas to many countries of the world.
Malaysian firm Petronas and Russia also aspire to supply LNG to Pakistan in a government-to-government arrangement. However, they have made it clear that they will be able to provide gas only after two years.
In this scenario, the only choice for Pakistan is to go for LNG purchases from Qatar. It has finalised all contract provisions with Qatar except for the price and expects to see first consignment arrive by the end of the current month.
In another major project, the government is going to award a $3-billion Gwadar LNG pipeline and terminal contract to a Chinese company, which will serve as an alternative to the Iran-Pakistan (IP) gas pipeline project.
Pakistan has already missed the deadline for receiving the first flow of gas from Iran at the end of December 2014.
Officials point out that Oman and Iran have inked a gas pipeline accord and Muscat will also build an LNG terminal for handling supplies. In an extended arrangement, they suggest, Pakistan could also get Iranian gas through Oman in the form of LNG, which would be shipped to Gwadar.
Russia has signed an initial deal with Pakistan in the form of a protocol for laying an LNG pipeline from Karachi to Lahore. This has sparked hope that Pakistan will start receiving gas from Moscow after two years.
The gap between demand and supply of natural gas in the country has widened to 2 billion cubic feet per day (bcfd) with supplies at 4bcfd.
To bridge the shortfall, the Ministry of Petroleum and Natural Resources is pushing ahead with different gas pipeline projects. In addition to these, LNG terminals will be built at the Port Qasim and Gwadar Port, which will handle imported gas with an estimated re-gasification capacity equal to around 2bcfd of natural gas.
Published in The Express Tribune, February 13th, 2015.
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