KARACHI: The federal government is considering allowing power plants and other private companies to directly import liquefied natural gas (LNG) as authorities seek to shore up energy supplies without putting additional strain on state finances, a person familiar with the matter said on Wednesday.
According to a Bloomberg report, two of the country’s LNG import terminals have remained largely idle since March, when the conflict in the Middle East virtually halted shipments from Qatar, Pakistan’s largest LNG supplier.
Existing regulations don’t easily allow buyers apart from state-owned Pakistan LNG Ltd to procure cargoes from the spot market.
The Energy Ministry’s petroleum division has submitted a proposal to greatly increase the scope to auction unused capacity at the terminals and allow private companies to import LNG directly, according to the person, who asked not to be named as the information isn’t public.
A director general for the petroleum division didn’t immediately respond to a request for comment.
Pakistan GasPort Ltd, which operates one of the terminals, has long called for non-state-owned firms like itself to be allowed to import LNG.
The South Asian country has been struggling with rolling blackouts and a fuel shortfall as the near-closure of the Strait of Hormuz for gas vessels drastically cut back its LNG deliveries.
While Pakistan has been purchasing some shipments from the spot market to replace lost Qatari flows, prices are more than double pre-war levels, weighing on government finances.
Amid escalating tensions in the Middle East and prolonged disruption to fuel supplies through the Strait of Hormuz, Pakistan was left with little option but to procure expensive spot LNG cargoes to maintain gas supplies for power generation and industrial consumers.
Earlier this month, Pakistan received a boost to its LNG supplies after a Qatari cargo carrying 81,936 metric tonnes of liquefied natural gas docked at Port Qasim after crossing the strategically important Strait of Hormuz amid heightened regional tensions, The News reported.
