Govt to grant LNG terminals’ capacity to private sector

ISLAMABAD: In a major move to gradually deregulate gas tariffs, the state-run liquefied natural gas (LNG) importer on Thursday expressed intention to grant capacity to the private sector – a decision that had so far been pending due to acquisition of surplus capacity of LNG terminals by the government.

A representative of Pakistan LNG Limited (PLL) said they could not award any capacity due to the public sector’s high gas demand.

The government will re-advertise the granting of capacity to the private sector in February or March 2021, the official said during a public hearing at the Oil and Gas Regulatory Authority (Ogra).

“We will issue an advertisement to grant capacity in February and March, as the private sector could import LNG,” he said. Energas had participated but it was short of marketing licence, he added.

Meanwhile, Ogra questioned the incomplete documents of agreements with LNG suppliers, customers, capacity allocation, gas volume, and timeframe of imports of the petitioner Energas that sought a licence for sale and marketing of LNG.

Energas and Tabeer Energy lack capacity allocation on the operational terminals. Both the companies are setting up LNG terminals free of the government’s guarantee.

When OGRA sought companies’ response, Energas CEO Anser Khan said they had been shuttling between the PLL and Ogra for the last four years, but so far not succeeded in getting the LNG sale and marketing licence.

“Taking government departments’ approval is a big challenge. PLL is asking for a sale and marketing licence while OGRA is demanding for capacity allocation agreement,” said Khan.

After hearing the companies and PLL, the authority’s member gas admonished the PLL for unnecessary hurdles in the capacity allocation. He also directed PLL’s CEO to bring the draft rules to Ogra to settle this issue.

Shigeki Terada, representing Tabeer Energy said they had an integrated plan of LNG for a non-interrupted supply of gas to different sectors especially CNG and power.

Yasir Mukhtar, a team leader of Tabeer Energy said Mitsubishi has a portfolio of operations and developing projects in the global market. LNG project will be first fully integrated in Pakistan. It will be a 100 percent private terminal that would reduce the financial burden on the government.

The terminal would be a floating storage regasification unit based and handle 20 cargoes per year. And it shall be made operational in the first quarter of 2023.

Jawad Majeed, general manager of Tabeer Energy said the terminal will be commissioned by the first half of 2023. The company will import LNG, re-gasify, and sell to consumers. The government will be free of the off-take guarantee. “We will use the north-south gas pipeline which is being laid with the collaboration of Russia.”

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