More LNG terminals need to be built to reduce energy deficit: PM Shahid Khaqan

Pakistan second Liquefied Natural Gas or LNG terminal will receive its first consignment on November 24 after it has been inaugurated Monday by the Prime Minister of the country Shahid Khaqqan Abbassi.

Pakistan Prime Minister Shahid Khaqqan Abbassi while inaugurating the second LNG terminal at Port Qasim second port in the southern city Karachi said the terminal through Floating Storage and Regasification Unit will be providing nearly 600 mmcf/day of gas. “More LNG terminals would be constructed in the country aim to reduce the energy deficit and bolster economy”, he said.

In June 2016, the government awarded the contract to Pakistan Gas Port to build second terminal and at a handling fees of $0.4177/mmbtu.

The first LNG import terminal has been in operation since 2015 was set up by Engro’s Elengy Terminal Pakistan Limited. It has an installed capacity of 600mmcfd where the handling fees of LNG have been fixed at $0.66/mmbtu.

Italian energy giant Eni and Gunvor will bring one cargo each in a month whereas four cargoes have been arranged through spot purchases.

Pakistan is currently importing 600 mmcf/day of LNG per day through the only LNG terminal at Port Qasim. The second terminal will handle another 600 mmcfd, taking the total import volume to 1.2 billion cubic feet per day.

LNG imports are expected to grow exponentially, as more terminals are ready to start operations, with Platts Analytics forecasting demand to reach more than 16 million mt/year by 2022.

Pakistan LNG estimates Pakistan's unconstrained demand will hit 30 million mt/year, or 4 Bcf/day of gas equivalent, by 2022, which is half of the country's total gas demand projection of 8 Bcf/d for that year, according to government estimates.

With domestic gas production faltering and pipeline import projects still uncertain, the country's dependency on LNG imports to tackle its gas and energy crisis is unlikely to fade away, especially since global oversupply and low LNG prices are resulting in better supply terms for customers.