Prime Minister Yousuf Raza Gilani believes that 500 million cubic feet import of Liquefied Natural Gas (LNG) would help the country's powerhouses generate 2500 megawatts of electricity to bridge the present 7500 MW supply-demand gap. One can only hope that the government's plan would see the light of day. For years, the matter of balancing country's supply against the demand for electricity has remained a largely unresolved matter. Plans to import natural gas as one of the solutions to growing electricity shortages have been on the table for over two decades, but thus far have not materialised. We are afraid that the present approach toward future LNG imports will not work either and the Ministry of Petroleum appears to be clutching at straws in the wind. Our apprehensions rest on dividing the LNG import plan into two distinct areas, ie (a) bidding for import of LNG; and (b) establishing a terminal at Port Qasim. Previously the plan was a more integrated approach, ie bidding to import LNG as well as establishing a terminal at Port Qasim known as the Mashaal project. Unfortunately, however, the process got derailed as the Supreme Court stepped in and the Economic Co-ordination Committee (ECO) too was beset with controversy with the Ministry of Finance questioning the process adopted by the Ministry of Petroleum and Natural Resources at the behest of Fauji Foundation. Even though the court had not advised against continuing the process; the Ministry of Petroleum in its wisdom decided to scrap the bidding round and subsequently divided the bidding into two distinct rounds - one for importing LNG and the other for establishing the LNG terminal. One needs to understand that the importer has to tie both ends simultaneously, ie sign up with the consumer of LNG for off-take ie power generation as well as have guaranteed source of supply. Once it ties both ends, then only will it invest nearly half a billion dollars in a terminal. The other option is, the government either invests directly or provides a guarantee or else enter into a public-private partnership for establishing the terminal. We are afraid that asking for mega-investment in an infrastructure project of this magnitude, under the present investment climate may not materialise. End-to-end solution from a single consortium with deep pockets is the answer. But time is of the essence. Dilly-dallying on the pretext that import of natural gas can come from the US at one-fourth the price is unrealistic. The US at present does not have the export infrastructure for natural gas. Had it been so, Japan and China would have opted for import via the Pacific to balance their trade instead of importing from Qatar and the Middle East. Pakistan will surely miss the boat, if does not sign up with Qatar quickly. The Government of Qatar is likely to advise Pakistan to sign up with one of its existing long-term buyers for import of LNG. No investor or supplier will wait for us while we play hooky in taking a decision. We are not the only destination for investment and no one is beholden to help us in this present crisis. Copyright Business Recorder, 2012
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