KARACHI: Pakistan State Oil Company (PSO), which is the largest gas importer and fuel retailer, is going to build an import terminal for liquefied natural gas (LNG) at $500 million, Bloomberg News reported on Monday.

The import terminal will be located near Karachi and will take four years to complete, the international news agency quoted PSO CEO Syed Muhammad Taha as saying.

The company has an understanding with a few large customers and has begun preliminary preparations for the project that will include Pakistan’s first LNG storage facility, he said.

Pakistan has been one of the fastest-growing markets for LNG, which it mainly uses to generate electricity following a decline in local gas production over the last decade. But surging prices, spurred in part by Russia’s war in Ukraine, have seen the country struggle to afford the fuel this year, resulting in frequent blackouts.

CEO says company wants to venture into different areas

“As long as there’s a geopolitical crisis in place, prices will remain elevated, but eventually it will come down,” Mr Taha said. “As soon as the prices are conducive, we’ll go ahead.”

PSO, which owns a network of 3,500 service stations and is the country’s largest company by revenue, may look for a partner for the project, the CEO said. He didn’t offer exact details on the size of the project, whether it’d be onshore or floating or when it’d become operational.

The country currently has two floating LNG import terminals, both near Karachi. Qatar and Mitsubishi Corporation have also said they plan to invest in terminals.

PSO expects demand for gasoline and diesel to fall 5-7 per cent in 2022-23, and doesn’t plan to buy any more fuel oil over the period, Mr Taha said. The government is in discussions with Middle Eastern countries on long-term deals that will satisfy about 80pc of its imported gasoline requirements, he said. Pakistan already has these types of arrangements for LNG and diesel.

The fuel retailer is also planning to apply for a licence to become a mobile wallet operator, and eventually start a digital bank, Mr Taha said, adding that it’s allocating Rs1 billion to set up a venture capital fund.

“So going forward, our objective is very clear. We want to venture into different areas.”

Published in Dawn, September 20th, 2022