Mitsubishi setting up 3rd LNG terminal as gas demand increases

ISLAMABAD: Japanese leading business conglomerate Mitsubishi Corporation is setting up another liquefied natural gas (LNG) terminal in Pakistan after the successful operation of two terminals that have already been commissioned as the government is exploring oil-substitute means to meet growing energy needs in the country.

“Mitsubishi is undertaking several joint ventures in Pakistan and is also setting up Pakistan’s 3rd LNG terminal,” a government statement said after the meeting between Prime Minister Shahid Khaqan Abbasi and a delegation of Mitsubishi Corporation and Diamond Gas International, led by Kimihidi Ando, senior vice president of Mitsubishi.

Presently, Pakistan has two LNG terminals with a combined re-gasification capacity of 1.2 billion cubic feet per day (bcfd). Global energy producers including Exxon and traders like Vitol are taking keen interest in the country’s energy market with gas shortfall expected to further increase with rise in number of gas consumers.

Pakistan with a population of over 200 million and economic growth of five percent plus has the growing appetite for LNG imports, which are expected to climb fivefold to 30 million tonnes a year by 2022.

Ando thanked the Prime Minister for Pakistan’s support to Mitsubishi Corporation’s operations in Pakistan and expressed a desire to further expand investment in energy projects. Mitsubishi is one of the largest trading companies of Japan and is among the world’s leading infrastructure development, logistics, energy, metals, machinery, chemicals and household appliances producer.

Abbasi appreciated the company’s diverse investment in Pakistan. “He informed the delegation that Pakistan has achieved significant economic stability and improved law and order situation that has boosted the confidence of local and foreign investors to invest in Pakistan,” the statement quoted the Prime Minister as saying.

“The government undertook mega energy projects to address the energy issues faced by the county.”

Oil and Gas Regulatory Authority (Ogra) said consumer addition is increasing the gap between demand and supply (of gas) day by day. Especially in winter, gas demand further increases and as a result the government is forced to curtail supplies to various sectors.

Ogra said gas shortfall is likely to increase to the tune of 3.9 bcfd in FY2020 and 6.6 bcfd by FY2030. Alone in the last fiscal year of 2016/17, gas utilities added 486,418 consumers, including domestic, commercial and industrial, in their systems.

Presently, natural gas is contributing nearly 46 percent to Pakistan’s primary energy supply mix.

The country produces around four bcfd of natural gas against the demand of more than six bcfd.

Engro Elengy Terminal Limited was the first to have commissioned LNG re-gasification terminal at Port Qasim three years back. Pakistan Gas Port Consortium Limited was the second terminal at the port. Share of imported LNG in total gas supplies stood at mere 16 percent during the last fiscal year of 2017.

“The addition of new LNG re-gasification terminals and respective enhancement of pipeline capacities of gas

utility companies of the country shall open up new business avenues and help diversifying Pakistan’s energy basket,” Ogra said in an annual report on state of the industry.