The multi-billion-dollar Liquefied Natural Gas (LNG) import project is no longer being pursued after the departure of Dr Asim Hussain, the former minister for petroleum and natural resources. A senior official of the Petroleum Ministry told Business Recorder that although LNG import was "crucial" for resolving the energy crisis, but the process "has been delayed".
"For the time being, the project is in doldrums. No further development has been made in this regard after the departure of the former government," the official maintained The $25 billion liquefied natural gas equivalent to 400 Million Cubic Feet daily (mmcfd) import project initiated by the Sui Southern Gas Company (SSGC) has been delayed.
On March 12 this year, Dr Asim Hussain announced that Pakistan would start import of 200 million tons of LNG from Qatar on government to government agreement basis. He did not specify the agreed upon price. The decision to opt for government to government had been taken after the Supreme Court stopped the award of LNG import contract to the private sector at $17 per MMBTU from Qatar.
The first tender for the project was floated in December last year and was scrapped by the ECC after two of the three bids became controversial because of minor flaws in the bidding process. However, the SSGC floated another tender on February 18 this year for import of LNG equivalent to 400 mmcfd. This time, the bids of all three parties that participated in the previous tender were accepted.
The official stated that Pakistan could easily import LNG from the US at $10 per Million British Thermal Unit (MMBTU). The US is producing LNG at about $4.5 per MMBTU, adding if Pakistan was going to import the commodity from the US transportation cost and other expenditures would be around $5.5 per MMBTU. "The interim government can execute the project if they are willing to do so. However, the domestic situation does not allow decision making by a non-elected government," the official said when asked why the interim government had not shown any interest in LNG import.
"After facing so many cases in the apex court relating to tendering and procurement the best option would be to allow the next elected government to finalise the project. At least, it will save everybody from hassle and inquiries later if objections are raised from fora such as NAB, FIA and courts," the official said.
"Any decision regarding LNG is not likely to be taken before mid-July or August but Pakistan desperately needs LNG imports to resolve the energy crisis," the official said adding, "It would take up to 12 months for the first LNG ship to land in country after signing of the agreement." To finance the imported gas projects the government has imposed Gas Infrastructure Development Cess (GIDC) on industrial, fertiliser and CNG sectors.