Noted businessman and Chairman Associated Group Iqbal Z Ahmed suggested that the government should ensure continued support to LNG sector and deregulate the sector for a level playing field. "There are many loopholes and the private sector's role in LNG has yet to be defined. Free this industry and let the private sector jump in and the country will observe a stiff competition and a drop in LNG prices," Ahmed said.
While talking to Business Recorder Iqbal Z Ahmed said that deregulation of the LNG sector will increase competition in the market, bring down its price and attract private investment in pipeline infrastructure for gas transmission.
He also said LNG price depended on market forces and a couple of surplus cargoes could bring down the rates.
By 2020, it is anticipated the country's LNG imports will rise to 30 million tons. Presently, the country's total gas deficit is approximately three billion cubic feet per day, from which 25 percent is being filled in by LNG imports.
Currently, Pakistan's overall gas deficit is around three billion cubic feet per day, 25% of which is being met by importing LNG through floating storage and regasification units. To date, two RLNG terminals have been set up by the private sector to streamline the entire process.
Ahmed was of the view that LNG was the future of Pakistan. "LNG is the only option, which can save foreign exchange, unlike furnace oil which is much costlier and coal, which has transportation, handling and environmental issues."
The group's first 750 mmcfd LNG import terminal, also commissioned at Port Qasim under the Pakistan Gas Port Consortium was supplying RLNG to Punjab-based power plants through the second LNG terminal under an agreement and is planning to invest $500 million in another LNG terminal exclusively meant for the private sector.
Seeking government's approval, the Associated Group has inked an agreement with Universal Gas Distribution Company to sell its excess 150 million cubic feet of RLNG per day (mmcfd) to compressed natural gas (CNG) outlets. "After government's approval the load of CNG sector will be shifted from system gas to the private sector," said Iqbal Z Ahmad.
He pointed out that in Karachi alone, the demand existed for 200 mmcfd and after adding another 700 mmcfd via the third terminal they could be able to meet private-sector demand up to central Punjab.
"We as a group will take care of all necessary financing and logistical arrangements if the industry wants guaranteed supply of processed gas," Ahmad said.
Chairman Associated Group said that group is in the process of teaming up with a couple of Chinese companies to introduce 'virtual pipeline' concept in Pakistan, a model which can ease the pressure off public gas utilities, particularly in winter.
Under the model, the group will provide re-gasified liquefied natural gas (RLNG) to industrial and commercial units via land route. A dedicated fleet of tube trailers or trailer-mounted containers will be built and utilised for LNG transportation from the terminals at Port Qasim to industrial units in Sindh, Punjab and at later stages to the northern region.
The fleet will be equipped with all the necessary machinery and equipment for converting LNG into RLNG. Iabal said that the concept of virtual pipeline is not new to the world. In the entire North America, natural gas is transported by using this technology. Also, many European and Asian countries are using this technology. In China alone, around 19 million tons of LNG was transported via land route last year.
In Pakistan, domestic, industrial and commercial consumers enjoyed cheap natural gas via a complex underground pipeline network until 2007 - the time when gas reserves started depleting in the country.
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