PTI govt cuts LNG imports amid low demand

ISLAMABAD: The government has cut import of liquefied natural gas (LNG) to avoid excessive pressure in pipelines of public utilities following low demand and reluctance of the power sector to consume expensive gas.

Pakistan has two LNG terminals with import handling capacity of 1.2 billion cubic feet per day (bcfd). The government has LNG supply contracts for 800 million cubic feet per day (mmcfd), which includes 500mmcfd from Qatar, 200mmcfd from Gunvor and 100mmcfd from Eni. The remaining supplies are brought through spot contracts.

The LNG terminals have been set up on a take-or-pay basis, which means the government would have to pay capacity charges even if the terminals are not operated at full capacity. The previous government had also set up three LNG-based power plants with a take-or-pay clause.

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