ISLAMABAD: The government on Tuesday made capacity allocations to import 500 million cubic feet per day (mmcfd) of liquefied natural gas each to three companies, with first delivery expected in October next year.

Petroleum Minister Dr Asim Hussain told Dawn that the three companies were required to provide performance guarantees of $10 million each to meet their LNG delivery deadlines. He said the Global Energy of Turkey was expected to start importing LNG in October 2012, followed by Engro Corporation in December 2012 and Pakistan Gasport in 2014.

He said the companies were now required to submit their timelines for the import while two gas utilities SNGPL and SSGCL would arrange Rs1.2 billion financing to put in place infrastructure to receive LNG to be imported by the three companies. He said the capacity allocations were made by the Oil and Gas Regulatory Authority (Ogra) in consultation with the ministry of petroleum.

The Ogra had already issued construction licences to the three companies to set up LNG terminals on a fast-track basis to offset severe gas shortfalls estimated at about 1.9 billion cubic feet per day during upcoming peak winter. About 500 mmcfd of LNG could produce about 2,500mw of electricity. Because of higher import costs, LNG would primarily be used for power generation.

The import of LNG and its utilisation infrastructure is expected to be completed by end of next year that would include laying of a separate pipeline to cater to increased capacity for transportation of gas from Port Qasim to Punjab province.

The PQA was already working with investors to develop a jetty and terminal facilities for handling LNG. Under the Third Party Access rules now finalised by Ogra, LNG importers would use pipelines of gas utilities for transportation of the fuel across the country.

According to Ogra, Pakistan is currently facing gas shortfalls of 1.5 to 2 bcfd that would partially be bridged through LNG imports.