CNG sector to revive after Pak-Qatar LNG deal: APCNGA
APCNGA welcomes the Pak-Qatar LNG deal.
Dunya News Reports (Yaruq Malik)
ISLAMABAD: The All Pakistan Compressed Natural Gas Association (APCNGA) has welcomed the deal between Pakistan and Qatar for the import of Liquefied Natural Gas (LNG) and has assured that with the import of LNG in Pakistan, the CNG sector will revive once again.
APCNGA Chairman Ghiyas Paracha praised the efforts made by the federal government to tackle the energy crisis in Pakistan through the import of LNG and expressed confidence that through the Pakistan-Qatar LNG deal, hundreds of CNG stations across the country will reopen that had been closed due to the shortage of gas for several years.
The Chairman said that CNG is an environment-friendly fuel and remains thirty percent cheaper than petrol. He added that the APCNGA will put efforts in bringing the current CNG price down from Rs 52 per litre to Rs 47 per litre. He said that consumers will benefit from the availability of CNG and its lower prices.
Previously, Pakistan and Qatar officials signed several Memorandums of Understanding (MOU) including the import of Liquefied Natural Gas (LNG). Pakistan will import 3.75 million tons of LNG (annually) from Qatar-Gas Company to tackle the gas and power shortages in the country. During Prime Minister Nawaz Sharif’s visit to Qatar, the Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi signed the agreements to increase co-operation in various fields including energy, trade, defense, investment, education, health, academic research, radio and television.
The most prominent aspect of the LNG deal between Qatar and Pakistan is that Qatar will now provide 3 LNG ships each month as compared to the previous deal which ensured the delivery of just 2 LNG ships a month.
Moreover, the government had been under pressure from the National Accountability Bureau (NAB) after the LNG scandal that took place prior to the Pakistan-Qatar LNG deal. The government had planned to buy LNG at inflated prices in order to tackle the energy crisis in Pakistan which would have cost Pakistan $5 million per day according to the Pakistan Economy Watch (PEW) officials. According to PEW, the deal would have finalized at $18/per million British thermal units (MMBTU) which would have eventually become $21/MMBTU at the Karachi ports. This deal would have caused a 200 percent increase in gas prices for the end users.
Qatar had offered its LNG at the price of 13.9 percent which was refused by the ECC Chairman and Finance Minister Ishaq Dar. Due to this refusal of LNG prices by the ECC, the Qatar authorities expressed concerns which could have jeopardized the Qatar-Pakistan deal. Surprisingly, the Qatar officials at Qatar-gas Company lowered the prices of LNG from 13.9 percent to 13.37 after the Federal Minister for Petroleum and Natural Resources visited Qatar to discuss the issues concerning the LNG deal.
Furthermore, the secretary petroleum Muhammad Ejaz Chaudhry was fired due to his resistance against the disputed deal. The Oil Gas Regulatory Authority (OGRA) was also put under pressure by the government due to the institution’s disagreement over buying LNG at inflated rates.
The current deal between Pakistan and Qatar is not a ‘slope’ priced deal as under the ‘S’ shaped deal, the price would vary greatly due to the ever-changing economic conditions in the International market.
“The LNG price was not decided in ‘S’ shaped fearing the wrath of NAB,” the minister said.
“Pakistan’s energy future is directly linked to liquefied natural gas” said the Federal Minister. He stressed that LNG is the best solution for Pakistan’s energy crisis due to its cost effectiveness as compared to other available resources.
The first shipment of LNG is expected to reach Pakistani ports by April this year. Pakistan’s LNG requirements will reach up to 4 million tons per annum in 2017.
