Honorable War & Peace.
Before anything else, kindly read this:
“Pakistan LNG demand could triple over next 3-5 years
WED, MAR 06, 2019 - 12:39 PM
Pakistan's demand for liquefied natural gas (LNG) could more than triple in the next three to five @years, the chief executive of Pakistan LNG said on Wednesday. PHOTO: REUTERS
“[SINGAPORE] Pakistan's demand for liquefied natural gas (LNG) could more than triple in the next three to five years, the chief executive of Pakistan LNG said on Wednesday.
Last year, Pakistan imported nearly seven tonnes of LNG, data from Refinitiv Eikon shows. This year, that could grow to as high as 15 million tonnes and to up to 25 million to 30 million tonnes over the next three to five years, said Adnan Gilani, managing director and chief executive of Pakistan LNG.
Pakistan LNG is a state-owned company that buys LNG from the international market to supply to the domestic market.
Both of the country's existing LNG terminals are currently nearly fully utilised. Another two are expected to announce a final investment decision this year.
Pakistan's two import terminals have a regas capacity of 1.2 billion to 1.3 billion cubic feet of gas per day, or about nine million to 10 million tonnes of LNG a year, according to Mr Gilani's presentation at the LNGA 2019 conference in Singapore.
Pakistan is expected to negotiate a few more long-term contracts to import LNG into the country, Mr Gilani said.
Pakistan is facing a serious energy crisis with repeated blackouts and gas supply outages that led to the sacking of the heads of two of its main gas distribution utilities in January.”
https://www.businesstimes.com.sg/en...n-lng-demand-could-triple-over-next-3-5-years
And this:
"Exxon Mobil, Shell among groups picked to build five Pakistan LNG terminals
ISLAMABAD (Reuters) - Pakistan has given the go-ahead to five consortiums, including Exxon Mobil, Royal Dutch Shell and Mitsubishi, to progress with their liquefied natural gas (LNG) terminal plans, a minister told Reuters on Friday.
The move comes on the heels of the arrests of two Pakistan business executives involved in building the country’s previous LNG terminals, cooling sentiment in the industry.
Pakistan is seen as a big growth market for the global LNG industry as domestic gas production slips in tandem with a growing industrial economy hungry for gas.
But an anti-corruption drive by Prime Minister Imran Khan led to the arrests of a former boss of Engro, which built the first import terminal, and the chief of another company associated with a second terminal.
Power and Petroleum Minister Omar Ayub Khan downplayed any impact the arrests may have had on investors’ sentiment, saying the interest from multinationals spoke for itself.
“That is a ringing endorsement that (our) policies are clear and transparent,” he said. “It’s a competitive market.”
The groups approved to progress are Tabeer Energy, a unit of Mitsubishi, Energas with partner Exxon; Pakistan GasPort and commodities trader Trafigura; Engro with partner Shell, and Gunvor with Pakistani conglomerate Fatima.
Tabeer Energy, Engro and Energas already announced plans for the terminals which will be Floating Storage and Regasification Unit (FSRUs) vessels. These can be newbuild or converted LNG tankers, speeding up the delivery of the import projects.
Exxon and Shell did not respond to requests for comment. Mitsubishi has project details on Tabeer Energy’s website. Engro, Fatima and GasPort were not immediately reachable for a comment.
Trafigura declined to comment on the specific project but said it was “committed to grow and expand its existing regas (regasification) capacity” in Pakistan.
The five groups must submit plans for the terminals to the ministry of ports and shipping by Nov. 5 for approval, but cabinet has already approved them, Khan said, adding they could be in operation within two to three years.
While the consortiums will pay for the construction of the terminals and royalty fees, Pakistan’s contribution will be to fund the building of a $2 billion north-south pipeline to distribute the gas, and storage facilities, he said.
SIGNIFICANT DENT
Pakistan is chronically short of gas for power production and to supply manufacturers such as fertiliser makers, hobbling the country’s economy.
Its two LNG plants have a capacity of 4.5 million tonnes a year (mtpa) each. Khan said a third 4.5 mtpa terminal could start next year. Imports amounted to 6.7 mtpa in 2018 and are set to rise to 7.9 mtpa this year, according to Refinitiv data.
The new terminals “will make a significant dent in the gas shortage,” Khan said.
But the under-utilisation of one terminal points to a structural problem in Pakistan’s energy industry, analysts have said, which is characterised by subsidised but dwindling domestic gas rivalling more expensive LNG.
“I think they are assessing the demand as the second LNG terminal is currently underutilised,” one industry source said. “Domestic gas is cheaper and LNG is expensive. Plus we have some coal plants which are cheaper than RLNG fired power plants.”
The fertiliser industry, a large consumer of gas, has suffered from a steep increase in government-set prices, Sher Shah Malik, executive director of Fertiliser Manufacturers of Pakistan Advisory Council, told Reuters.
Two of Pakistan’s urea plants lack gas to run regularly and one closed last year, forcing Pakistan to import fertiliser. Malik said LNG, priced at international benchmarks, was often too expensive for fertiliser companies pointing to a need to tap new domestic gas reserves.
“We are heading for very difficult times,” he said. “If nothing happens, we’ll be high and dry.”
https://in.reuters.com/article/paki...ight-to-five-lng-terminal-plans-idINKBN1W50H2
Ground realities are that Pakistan is desperately short of gas. New finds are minuscule and the TAP pipeline project has not progressed beyond the discussion stage. Iran-Pakistan gas pipeline is not likely to be completed any time soon due to sanctions on Iran. In such circumstances, the only way Pakistan can make for the gas /energy shortages is through the import of LNG. However, everyone is scared of being put behind bars on mere suspicion and without being charged. Why would any one dare to sign a 10-year deal? They would rather import on 'Spot' basis. Even if there is an increased gas loading shedding due to delay in the arrival of imported LNG, so what? No one has gone to prison for causing energy shortage!
Additionally, if there would be no demand for the LNG, why is GOP giving a go-ahead to 5 new LNG terminals?
Nevertheless, if you would rather the lame excuse that there is no demand; you are welcome to your opinion.
