Govt to explore solar options amid high energy costs, zero LNG

Published July 8, 2022
Minister for Power Khurram Dastgir (R) and State Minister for Petroleum Musadik Malik (L) address separate press conferences on July 7.— DawnNewsTV
Minister for Power Khurram Dastgir (R) and State Minister for Petroleum Musadik Malik (L) address separate press conferences on July 7.— DawnNewsTV

• PM to announce detailed solar energy policy for residential consumers on Aug 1
• Minister says gas rationing to be explored, LNG not an option

ISLAMABAD: With high energy shortages and its record prices, Pakistan could not get even a single bid for 10 cargoes of liquefied natural gas (LNG) for end-July to end-September, compelling the government to announce ‘gas rationing’ and maximise solar power production of 7,000-10,000 megawatts before the next summer.

Federal Power Minister Khurram Dastgir Khan and Minister of State for Petroleum Musadik Malik on Thursday held separate news conferences to blame the previous PTI government for allegedly leaving the country in a mess.

Mr Dastgir said Prime Minister Shehbaz Sharif would announce a detailed solar energy policy on Aug 1 under which a one-kilowatt solar set-up would be installed in the first phase for 2,000MW in small feeders of residential areas which would then be upgraded to 3kW for producing 7,000-10,000MW before the next summer.

He said this was not only a solution for high energy costs, but also a means for energy security. The government would facilitate these 1kw to 3kw solar systems for residential consumers and its cost would be adjusted in installments against monthly electricity bills. The prime minister had been given an initial briefing on the solar policy.

Also, the policy would initially enable setting up of seven solar plants at the existing sites of thermal power plants for which land and transmission lines were already in place. Contracts would be given to private entities through open competitive bidding on the basis of lowest rates. Likewise, government buildings would be shifted to solar power on the pattern of the Parliament House that was saving millions every month.

Similarly, the tubewells across the country would be converted to solar power, beginning from Balochistan.

Dr Musadik Malik in his separate presser said LNG was not available anywhere and repeated tenders for it were receiving no response because there was no molecule in the market. He said the previous government did not secure LNG when it was getting offers at $4 per million British thermal unit (mmBtu) at a total cargo cost of $12.5 million.

He said the incumbent government was doing its best even at bilateral levels to secure LNG at whatever cost for a year or so, but still had nothing to report except all suppliers wondering why the government did not sign a contract last year when Europe was securing deals and Pakistan was also receiving offers.

The state minister said gas rationing was being explored because the SNGPL that is supplying to Khyber Pakhtunkhwa and Punjab had only 670 million cubic feet per day (mmcfd) of gas, while the demand of residential consumers alone stood at 1,170mmcfd and there was no plan with the ministry, the regulator or gas companies as to how to meet the demand.

Mr Malik said the government had fulfilled major commitments the previous regime made with the IMF, and hoped that in the coming days the impact of petroleum products price reduction globally would be passed on to consumers for which due consultations with Finance Minister Miftah Ismail were required.

Meanwhile, there was not a single bid for 10 cargoes Pakistan was seeking for the last week of July to end September, as European customers suck spot market quantities to make up for Russian supply disruption.

The state-run Pakistan LNG Limited (PLL) had last week floated tenders for 10 cargoes – two for last weeks of July, five for August and three for the first three weeks of September. But not a single bidder responded.

Earlier, three separate attempts by PLL to get LNG cargoes in July remained futile. The suppliers in the spot market besides producers in the Middle East had been influenced by the US government to ensure maximum LNG supplies to the European countries that were ready to lift the commodity at any price to meet their energy shortages caused by supply disruptions from Russia.

The re-gasified LNG prices in Pakistan, despite a large majority of cargos coming from cheaper long-term contracts, have already gone up by 40pc to $22-24 per MMBTU in recent months owing to a string of spot cargos procured by the coalition government in its first month in office to meet energy shortages.

Coupled with a surge in coal and oil prices, these LNG rates have amplified electricity fuel costs by over 100pc as evident from the Rs8 to 10 per unit additional monthly adjustments approved for ex-Wapda distribution companies and K-Electric.

Published in Dawn, July 8th, 2022

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