KARACHI: Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi here on Saturday said the import of liquified natural gas (LNG) through Engro’s LNG terminal at Port Qasim will help the country to fill the supply and demand gap of natural gas and cut the electricity generation cost to half by replacing furnance oil.
“The country’s total natural gas production is 4,000 mmcfd, with shortfall of 600 mmcfd and this LNG terminal has capacity of handling 600 mmcfd. We can produce electricity at Rs 10 per unit against the cost of Rs 18 to Rs 20 per unit from furnace oil. This would save at least $ one billion per annum for Pakistan Government”, Abbasi said.
Shahid Khaqan Abbasi, flanked by Minister of State for Petroleum and Natural Resources Jam Kamal Khan, was speaking to the electronic and print media at the LNG vessel at Port Qasim after witnessing unloading of LNG and re-gasification processs there. Chairman Borad of Investment Dr. Mitah Ismail, Chairman Port Qasim Authority (PQA) Agha Jan Akhtar, CEO /President of Engro Energy (Pvt) Limited , Ali Ansari and senior officials of Sui Southern Gas Company (SSGC) were also present.
The first ship carrying 148517 cubic metres (3000 mmcfd) LNG from Qatar docked at Engro’s LNG terminal on Thursday evening. By injecting 200 mmcfd into the system, the unloading of LNG would be completed in 15 days. As a test case , 100 mmcfd LNG was pumped into the system today (Saturday) , informed CEO of Engro Energy (Pvt) Ali Ansari.
The Federal Minister said that initially the imported LNG is meant for fertiliser and power generation sectors; which later can be used by other sectors and for domestic consumption. This LNG shipment has been procured by private sector, Pak Arab Fertilizer Company, he said,
He said the arrival of first LNG vessel proved the PML-N government’s committment to overcome the energy cirisis at the earliest and pointed out that the past government made attempts to import LNG but could not succeed.
“We are importing 1.5 mts of LNG , whereas India imports 8 mts but the contract is very competitive in the region”, he explained,
To a question , he said the price is lower than diesel and is expected to be fixed at $ 8 per mmcf. However, he said, it will be finalised in the first week of April 2015.
When his attention wad drawn to Sindh Chief Minister Syed Qaim Ali Shah’s reservations on the import of LNG, the Federal Minister said that now Sindh will get 30 percent additional natural gas through this LNG terminal and that LNG possesses 1050 mbtu against 950 mbtu of the indigenous natural gas. A ship carrying LNG is like gas field with re-gasification capacity of 600 mmcfd.
He argued that LNG procurment is a commercial transaction and does not come under the ambit of Council of Common Interests (CCI) and added that prresent Federal government has abided by article 158 of the constitution more than the earlier ones regarding distribution of natural gas among the provinces.
Abbasi appreciated that with joint efforts of Engro Energy (Pvt) Limited, SSGC and PQA the LNG terminal was completed in eleven months after singing of the agreement at the cost of dollars 135 million. M/s China Harbou did the dredging and construction work.
” The terminal was completed six days earlier than schedule and below the estimated cost,” he remarked adding that 200 mmcfd was being added to the system through this LNG terminal.
He informed that another LNG terminal at Port Qasim will be constructucted by SSGC before the end of 2016. Third LNG termainal will be constructed at Gwadar with 711 kilometres pipeline and the tenders have been called for this purpose.
Chief Executive Officer of Engro Energy (Pvt) Limited , Ali Ansari said the terminal has capacity of 600 mmcfd. 400 mmcfd is for the public sector and 200 mmcfd can be available for private sector if interested. Engro will charge 66 cents per mtu as transport charges, he said.