SINGAPORE/DUBAI: The liquefied natural gas (LNG) importers in Pakistan have grown as the energy-starved country needs more resources to overcome the prevailing crisis.
The importers are also benefiting from a more than 50 percent drop in prices for the fuel, however, Pakistan, with 180 million people and insufficient domestic gas output of its own, is looking to LNG to help tackle serious energy shortages and frequent power cuts.
The country has received two LNG shipments, first arrived from Qatar, the world’s biggest liquid gas exporter, to Bin Qasim port in late March on the Excelerate Exquisite vessel, according to state-run Qatargas. The commissioning cargo of 147,000 cubic feet was bought at a spot price of about $8 per million British thermal units (mmBtu) on a free-on-board basis, industry sources said.
The second shipment unloaded around April 1 on the Norgas Conception vessel, Reuters ship tracking data shows. Elengy Terminal Pakistan Ltd, wholly-owned by Pakistan’s Engro Corp, completed the import terminal at Bin Qasim port in less than a year – a sign of the urgency of the country’s energy needs – at a cost of around $150 million, according to a statement from Engro.
LNG is being shipped to the terminal under a deal between state-owned fuel importer Pakistan State Oil (PSO) and Qatargas. While details of the contract remain unclear, industry sources said in February that Pakistan was in final talks with Qatargas on a deal to buy 3 million tonnes of LNG annually for 15 years.
Pakistan has also awarded a contract for a second LNG terminal to state-controlled Sui Southern Gas Company, and is considering building two more, Minister of State for Petroleum Jam Kamal Khan said in February.
Japan, South Korea, China and India still account for almost 70 per cent of total LNG imports, but the number of importers is growing fast, having doubled over the last decade to nearly 30. Besides Pakistan, five other buyers are expected to emerge this year – Egypt, Jordan, Philippines, Poland and Uruguay.
The increased demand comes just as a wave of new Australian supply in the second half of this decade is expected by some to create an oversupply in the global market. Asian spot LNG prices LNG-AS have more than halved since last year to around $7.50 per mmBtu.
