Private sector likely to be allowed LNG imports

LAHORE: The private sector is likely to be allowed to import Liquefied Natural Gas (LNG) from next month, the All Pakistan CNG Association (APCNGA) said on Saturday.

“During a recent meeting, Energy Minister Hammad Azhar was persuaded to allow the private parties including the CNG sector to import LNG on their own in a bid to meet the demand and overcome the shortage that mostly emerges in winter,” APCNGA chairman Ghyas Paracha told Dawn.

Public and private stakeholders were unanimous in the meeting to accord permission in this regard since most issues on the part of state-owned gas utilities and other entities have been resolved, the APCNGA office-bearer said.

“We are satisfied with the outcome of this meeting. If we place orders for LNG cargos during first week of November, we will have no shortage in the private sector in December and January, the peak winter months,” he explained.

In September 2020, the government had accorded permission to the private sector to independently import LNG. Since the sector’s total demand is about 200 million cubic feet per day (mmcfd) which varies based on the season. The CNG sector has a total 3,400 gas stations/registered members, out of which 700 have closed business due to short supplies, its demand ranges between 50 to 100mmcfd.

However, the bottlenecks allegedly on the part of Sui Northern Gas Pipeline Ltd (SNGPL), Sui Southern Gas Company (SSGC) and Pakistan LNG Ltd (PLL) delayed implementation of the government decision regarding grant of permission to private sector import LNG.

“The problem exists on the part of SSGC, SNGPL and PLL and not the government. The cabinet committee has already allowed the private sector to import LNG. However, the state-owned gas utility companies and PLL created hurdles. The gas companies had once even sought an unrealistic bank guaranty of Rs130 billion for importing LNG of Rs5bn,” Mr Paracha deplored.

“Finally we succeeded in convincing them to get the guaranty of US$300,000 that is justifiable under the government policies. Eventually, they removed this bottleneck,” he added.