Pakistan has surplus LNG to meet January demand: Musadik Malik
Federal Minister for Petroleum Musadik Malik informed the National Assembly that Pakistan currently has a surplus of LNG, with efforts underway to ensure sufficient gas supply for January. To address peak winter demand, the government has floated a tender for one additional LNG cargo.
Malik explained that despite fully utilizing local gas resources, the anticipated shortfall in the SNGPL system for January is projected at 100 mmcfd, with total demand estimated at 1,850 mmcfd compared to an available supply of 1,750 mmcfd. To bridge this gap, LNG imports are being utilized, and a tender has been issued for an additional cargo after Qatar declined Pakistan’s October request for one extra shipment.
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The minister revealed ongoing negotiations with another supplier to defer five LNG cargoes to next year and also requested Qatar to transfer five agreed LNG cargoes from this year to next. This arrangement would ensure surplus LNG availability while reducing procurement commitments for 2024.
Addressing concerns over gas supply to captive power plants, Malik highlighted that only 18 out of 2,500 industrial units in Karachi operate captive power systems, producing electricity at Rs. 13 per unit. Other industrial units purchase electricity from K-Electric at Rs. 60 per unit, creating a disparity in operational costs.
To address this imbalance, captive power rates have been rationalized, ensuring a level playing field for industrial units. The minister emphasized that there is no justification for shutting down captive power plants under the revised pricing structure.
Malik also discussed agreements with the International Monetary Fund (IMF) regarding captive power facilities. While the caretaker government had agreed to phase out captive power plants, the current government has argued against this measure, citing its potential negative impact on the country’s economic interests. Negotiations with the IMF and other multilateral institutions on this matter are ongoing.
The minister noted that when the original LNG contracts were signed, it was anticipated that 600 mmcfd of LNG would be utilized for electricity generation. This projection has influenced current supply and procurement strategies to meet evolving energy demands.
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