LNG, An Instant Remedy To Meet Growing Energy Needs

Over the decades, the rising demand of natural gas rapidly depleted its reserves and the country is now facing serious challenge of meeting gas and electricity demand of consumers. Rising population, improper usage of gas and electricity resource and injudicious subsidies equally benefiting both the poor and the rich, had been exerting extra burden on our resource as well as national kitty.

By the time, the country’s domestic gas extraction varies around 3.5-7 Billion Cubic Feet per Day (BCFD) against the demand of 8 BCFD and it is difficult for any government to domestic, commercial and industrial sectors need efficiently. Moreover, the official statistics record country’s indigenous gas reserves depletion at the rate of around nine per cent annually with the Exploration and Production (E&P) companies also making no major discovery since long.

The situation continued to worsen despite claims of the respective governments to overcome this problem and now the experts believe that in present circumstances LNG and LPG could be the immediate remedy to fill the supply and demand gap. Gauging the situation carefully, it is not only the supply and demand issue, but also serious governance issue of the previous government. If we compare the PPP and PTI government tenure with the PML-N, we manifest relatively better performance of the PML-N government during its 2013-18 tenure. The PML-N government during its previous tenure not only established two fast-track LNG terminals but also set up a public sector company – Pakistan LNG Limited (PLL), making a true calculation of country’s future energy needs.

Since then, the two LNG terminals are injecting around 1,200 Million Cubic Feet per Day (MMCFD) of gas into the national transmission lines for supply to consumers at the networks of both state-owned companies – Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company (SSGC).
It’s (LNG’s) significance can be gauged from the fact that Pakistan Tehreek-e-Insaf (PTI) government despite all criticism and blame game about the PML-N’s LNG import-related decisions, continued toeing the policy of its arch rival (PML-N).

In pursuance of the same policy, Imran Khan led government granted licenses for establishment of more LNG terminals and the commodity’s import besides signing another government-to-government LNG import agreement with one of the world top LNG exporters, Qatar. In January 2021, the Oil and Gas Regulatory Authority issued ‘provisional licences’ to two virtual pipeline private-sector companies enabling them to complete all formalities under the rules and apply for carrying out Liquefied Natural Gas (LNG) regulated activities in the country.

The companies had the plan to use berths at Karachi Port Trust (KPT) and at Gwadar Port respectively for the import of LNG cargoes, fill, transport, market and distribute the commodity under the ‘Integrated LNG Project Structure’ as per Article 2(a) of the LNG Policy 2011. These were the first of its kind projects in Pakistan for supplying gas mainly to off-grid consumers, facilitating national growth. The authority had also granted licenses to two private sector companies, Tabeer and Energas, for carrying out the regulated activity besides, construction and operation of pipelines for an initial period of 10 years. But, the situation continued to be worrisome for common consumers, CNG and industrial sectors facing gas load-shedding.

However, soon after assuming power in April this year, the coalition government not only addresses the poor management issues of the PTI regime, but also ordered to improve LNG import. This decision is hoped to improve LNG supply situation as well as make the power plants operational that had been shut down during PTI government. Chairman Oil and Gas Regulatory Authority (OGRA) Masroor Khan has also highlighted importance of LNG as he informed the 2nd Pakistan Energy Reform Summit-2022 about issuing more licenses for LNG import to meet energy needs.

He also underscored the significance of oil and gas including LNG which constituted 75 percent of the country’s total energy consumption. Meanwhile, a senior official privy to the petroleum sector said that Pakistan was actively pursuing the plan setting up a 1,100-kilometer pipeline to transport 1.6 BCFD of gas [mainly imported LNG] from Karachi to Lahore, under the Pak Stream Gas Pipeline (PSGP).

“Developing ‘Strategic Underground Gas Storages’ (SUGS) which were considered vital for any major importer of gas, especially the LNG was imperative,” he remarked.
Accordingly, he said the authorities concerned had decided to execute a project of establishing the SUGS by allocating funds amounting to Rs40 million under the Public Sector Development Programme 2021-22. It is aimed at meeting the country’s growing domestic and commercial needs, especially during the peak winter months from November to February.

Meanwhile, the underground facilities would be constructed in collaboration with the Asian Development Bank (ADB) and a consortium of European oil and gas equipment companies is leading its feasibility study. Experts believe that SUGS facilities are crucial for the country in view of the committed supplies of imported gas under international gas agreements and country’s fast-growing demand to keep pace with the economic progress.
Keeping in the mind the previous of the PML-N government during its previous tenure, people pin great hopes in the coalition government to steer country out of power crisis.

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