Pakistan’s first Liquefied Natural Gas (LNG) energy terminal has received 120 shipments and injected 7.4 million tonnes LNG in the national transmission network since start of its operations, saving US $1.2 billion per year in the national kitty.
“Established by Engro Pakistan, the plant was completed in a record 330 days and succeeded to transfer 120 LNG ships at the terminal since launch of its operations,” said the Chief Executive Officer of the EngroVopak terminal Ltd Jahangir Piracha while talking to media at the Port Qasim. The media briefing was arranged by Asian Development Bank (ADB) with objective to analyze the impact on Pakistan’s economy after the import of LNG.
The Asian Development Bank (ADB) had given a $30 million project loan to Engro Elengy Terminal Private Limited, for setting up Pakistan’s first liquefied natural gas (LNG) regasification terminal. With this project, Engro emerged as the pioneer of new energy source in the country and its first LNG terminal was proving to be the biggest source of gas.
The CEO said that LNG was the essential part of the energy needs of emerging economies as the world was turning towards LNG. The emerging economies like China, Korea, Japan, India, Thailand, Indonesia, European Union and Brazil were trying to ensure that LNG remains part of their energy mix. He said Japan and India were importing 80 million LNG tonnes and 15 MTPA respectively every year, due to the commodity’s cheap price and efficiency as compared to other fuels.
“Pakistan, India, Bangladesh, China and Thailand are the emerging markets of the LNG,” he added. He said Qatar, Australia and USA were the big exporters of the LNG. The CEO said the LNG handling capacity had been increased from 400 mmcfd to 630 mmcfd in a short span of time. He said the total handling capacity of the LNG terminal was about 4.5 million tons per year. The CEO said the LNG import had helped run around 750 CNG stations, which in the past had faced closure due to gas shortage.
He further said that the import of the LNG hoped to create about US $4.5 billion industry in the future. He said after start of LNG import, around 500 industrial units including textile industries had been revived. To a question, he said that Engro along with other partners were also thinking to install another LNG terminal. He was of the view that LNG efficiency was much better when compared to coal. He said the performance of the LNG run power projects would be much better and cheaper.
Following the import of the LNG, Pakistan has so far saved approximately US$ 1.7 billion for LNG being cheaper than furnace oil and diesel – major fuel sources used to run Pakistan’s power plants. LNG was also the cleanest burning hydrocarbon and the greenest fossil fuel. Compared to furnace oil, LNG was more efficient in power generation and had much lower operational costs thus contributing most to lower energy prices to end customer.
Pakistan had gas deficit of approximately over 2.5 billion cubic feet and current LNG import was reducing this deficit by 20 to 25 percent.
Internationally, over 240 MTPA of LNG was traded worldwide, out of which more than 170 MTPA was tied to take or pay contracts worldwide. Even coal dominated economies like South Africa had decided to opt for gas and were now developing framework to ensure imports of LNG. Commissioned on March 28, 2015, Engro’s LNG terminal at Port Qasim had the capacity to re-gasify 600 mmcfd gas.
Ever since the induction of LNG into country’s gas distribution network, the government had brought 2,200 MW of power generation online by switching it from expensive liquid fuels. This infrastructure breakthrough had enabled the government to address the energy crisis through investment in new gas fired power plants for additional 3,600 MW power generation capacity.
These power plants are under construction at Sheikhupura, Jhang and Kasur districts and will be Pakistan’s most efficient power generation units.