LAHORE: Pakistan has imported a record 10 million tonnes of liquefied natural gas (LNG) in the last three years, helping the country save approximately $3 billion in fuel imports.

The import of LNG, which is a cheaper source of energy than furnace and diesel oil, enabled the country to reduce total gas deficit of over 2.5bn cubic feet by 25 per cent, according to an official source familiar with the operations. Around 80 per cent of this has been under long and medium term supply agreements, and the remainder from spot markets.

The start of commercial operations of three new gas-fired power plants — Haveli Bahadur Shah, Bhikki and Balloki — with a total capacity of 3,600MW in Punjab will further increase the demand for LNG in future.

“Though a second terminal has also become operational at Port Qasim, Pakistan needs three to four more such facilities to address the ongoing energy shortage,” he believed.

The country imported LNG through the first private-sector LNG terminal — Engro Elengy located at Port Qasim. The terminal handled 160 LNG cargo ships in three years and currently regasifies approximately 600-630 mmcfd of gas and pumps it into the gas distribution network.

“The gas shortage had made the government unable to provide gas to different sectors of economy including power plants, CNG stations and fertiliser plants, resulting in huge production as well as foreign exchange losses, but the import of LNG has changed the scenario,” says the official.

The government was paying capacity charge (idle charges) to power plants which increased the price of electricity for the consumers. Saif Power, Halmore, Sapphire and Orient power plants were operating at less than 50pc service factor on diesel which is an expensive fuel compared to LNG. Non-availability of gas to fertiliser plants was also resulting in outflow of valuable foreign exchange as a result of imports to meet demand.

Due to LNG import, more than 200 CNG stations across Punjab have been getting gas at better frequency which has facilitated the transport industry as well as the public at large. The LNG as a fuel for power generation is more efficient over furnace oil (60pc more efficient on RLNG vs 40pc on alternate fuel), has much lower operation and maintenance costs and is thus friendlier on the economy in the form of lower electricity tariff for the masses.

“Liquefied petroleum gas costs $23 per mmBtu, high sulphur furnace oil $17.4 per mmBtu, high speed diesel $24.3 per mmBtu, motor gas $23.7 per mmBtu while RLNG costs just $10.8 per mmBtu, which clearly shows that LNG is a cheaper option compared to most fuels,” the official claimed.

Published in Dawn, June 14th, 2018