Textile industry wants share in LNG usage

Ten millers approach ministry to seek supply of imported fuel

ISLAMABAD:  The textile industry, worried about the prospect of acute gas shortage at its manufacturing units in the current winter season, has approached the Ministry of Petroleum and Natural Resources and demanded the supply of imported liquefied natural gas (LNG) for its captive power plants.

According to officials familiar with the development, around 10 textile millers have knocked on the door of the petroleum ministry to seek a share in the imported LNG to power their industrial units in winter, when demand from residential consumers go up and supplies to industries are cut off or reduced sharply.



Compressed natural gas stations, fertiliser producers and independent power plants have already got LNG to run their units.

Around 150 big industrial concerns are receiving about 400 million cubic feet of natural gas per day (mmcfd) for the captive power plants, but they are termed inefficient consumers.

The National Accountability Bureau has described the supply of natural gas to captive plants as a criminal act at the cost of efficient power plants, which were shut down due to gas shortage. The government has finalised a $16-billion LNG deal with Qatar and is seeking approval of a gas sale-purchase agreement from the Economic Coordination Committee (ECC) before signing the deal with Doha.



Under the plan, state-owned Pakistan State Oil (PSO) will import 200 mmcfd of LNG in the first year and 400 mmcfd from the second year.

The private sector also wants to bring LNG from its own sources. However, to the sector’s dismay, the ECC in a recent meeting approved the setting up of Pakistan LNG Limited under Government Holdings Private Limited with a mandate to import LNG from different sources.

“This indicates that the government wants to take control of LNG imports,” an industry player commented.

PSO has been designated by the government to strike a deal with Qatar for LNG purchases. However, future imports will be made through Pakistan LNG Limited.



The company will make arrangements for LNG purchase through open competitive biddings or a government-to-government contract under applicable rules including the Public Procurement Regulatory Authority (PPRA) rules.

Also, the company could hire a consultant for seeking advice on different commercial and legal aspects. Pakistan is currently facing a severe gas shortage, both for power generation plants and for general use by all sectors. Gas production stands at around 4 billion cubic feet per day (bcfd), which is insufficient to meet demand as the gap widens to 2 bcfd.

Published in The Express Tribune, November 27^th,  2015.

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