Pakistan energy crisis : WSJ Report

Pakistan energy crisis : WSJ Report

ISLAMABAD (APP): Pakistan is ramping up imports of liquefied natural gas (LNG) to overcome energy shortage, while undertaking the longer-term goal of upgrading its energy infrastructure with new pipelines, refineries and storage facilities.

Key to Pakistan's plan are floating terminals that will convert imported LNG into gas. The floating import terminals have opened up new markets for LNG producers, The Wall Street Journal reported on Wednesday.

The country started LNG imports in 2015, with Pakistani petrochemical and energy company Engro Corp. Ltd. leasing a floating import terminal, stationed in Karachi's Port Qasim from where gas is piped into Pakistan's local distribution system.

A second terminal is planned for mid-2017 by a consortium led by Pakistan GasPort Ltd. Up to five such terminals are needed, said Sheikh Imran ul Haque, chief executive of Pakistan State Oil.

"Pakistan has not seen as much restructuring in its energy sector as what's happening today in decades. And if we're successful, there's a potential investment of around $15 billion in refineries, pipelines, and the other projects coming in," Haque said.

He said that Pakistan will be in the market within the next four months to buy around 4 million tons per year of LNG to supply its second import terminal. The LNG will most likely be purchased in a series of tenders at between 0.75-and-1.5 million tons apiece, Haque added.

Pakistan officials see LNG imports as providing fast relief.

The country produces around 4 billion cubic feet of gas a day, meeting around half of the country's gas needs, Haque said.

Compounding the shortfall, domestic gas output is falling at a rate of up to 3% a year.

Each LNG import terminal can supply around 0.6-to-0.8 billion cubic feet of gas a day, Haque said.

In terms of meeting Haque's estimate of potential demand for five import terminals, China is planning the country's third floating import terminal at Gwadar Port. Three other floating import projects are under consideration, he said.

The floating gas terminals will feed a network of pipelines in Pakistan, including several in the works.

China is building a pipeline eastward from Gwadar Port to Nawabshah, in the southern province of Sindh. That will move gas from the floating terminals and could also help with the transit of gas from neighbouring countries.

Haque said industry is already benefiting from imported LNG.

Production at one fertilizer plant in Karachi has risen 5% since using LNG.