Pakistan inks $166mn LNG deal

166$mn

Pakistan inks $166mn LNG deal
ISLAMABAD: The first Liquefied Natural Gas (LNG) terminal project for the import of 400-500 million cubic feet (mmcf) LNG was signed here on Friday in order to overcome energy crisis in the country and to reduce growing dependence on expensive furnace oil.

The agreement was signed between Overseas Private Investment Corporation (OPIC)-an American company and Pakistan Gasport Limited (PGP), which was also witnessed by Federal Minister for Finance Dr Abdul Hafeez Shaikh and Federal Minister for Port and Shipping Babar Ghauri.

The US $ 166 million project's capacity would be 400-500 million mmcfd and the project will start its work by January 2012 and its completion period is one year.

"With the growing demand of energy, the country desperately needs to import electricity and gas in order to provide electricity and other facilities to the people on cheaper rates", Dr.Hafeez Shaikh said while talking to media after the signing ceremony of the agreement.

He said that the private sector can play its role to overcome the energy needs of the country and what the government can do is to facilitate the private sector and to help remove hindrances in their way.

Dr.Shaikh further said after the completion of this project the country would be able to produce 500 mmcfd LNG that will help reduce the cost and shortage of energy.

Babar Ghauri, speaking on the occasion said that presently the country was facing acute energy crisis and it was needed to take some practical steps in this regard.

He said signing of this project was first of the three projects and work on the other two projects would also be started soon in order to eliminate shortage of energy from the country.

During the ceremony it was informed that the country was facing gas shortage of 1000 mmcfd during summer and 1500 mmcfd in the winter.

The current primary energy demand and supply gap is approximately 22 million tones oil equivalent (mtoe), which is expected to increase to 71 mtoe by 2020.

The location of the project of Pakistan Gasport Limited would be at Kaderio Creek, Port Qasim Karachi.

The technology being used for the project is Fuel Storage and Re-gasification Unit (FRSU) connected via a sub-sea pipeline to the onshore metering station.

The main sponsor of the project is Joint Venture Limited (JJVL), which is also a nominee this year for the prestigious Platts Energy Awards.

The natural gas is a much cleaner fossil fuel and its price will also be invariably cheaper vis-à-vis furnace oil.

It will give 50 per cent savings in Operation and Maintenance (O & M) for power plants and eventually lower costs for the end user. (APP)