Private sector permitted to import LNG

ISLAMABAD: In a landmark development, in line with third party access (TPA) rules approved by the ECC, the government has decided to offload to the private sector some of its capacity of 600 million cubic feet gas per day supported by sovereign guarantee on PGPCL’s terminal.

Under the decision, the private sector companies will be able to import LNG and provide it to their consumers. This will also do away with the monopoly of Sui Northern and Sui Southern on LNG distribution among the various categories of the consumers.

The decision will also help give relief to the Pakistan LNG Limited (PLL) -- 100 percent state-owned company, which is bound to pay the capacity charges to the terminal against the offtake of 600mmcfd per day. Now under this new scenario, the private sector will share the burden of PLL in terms of payment of capacity charges to the terminal. And in return, the private sector will import LNG on its own and provide cheaper RLNG to its consumers.

They will use the capacity of the government and transport their product in the pipelines of both the gas utilities -- Sui Northern and Sui Southern.

And to this effect, Pakistan LNG Limited (PLL) is a public sector company and is a wholly-owned subsidiary of the Government Holdings (private) Limited (GHPL), which is 100 percent owned by the Government of Pakistan. PLL imports LNG at the LNG terminal located at Port Qasim and supplies the Re-Gasified LNG (RLNG) into the network of the gas utility companies.

PLL has issued to this effect an advertisement seeking interest from the interested parties to import 150mmcfd LNG in October 2020, 200mmcfd in November 2020, 200mmfd in February 2020 and 150mmcfd in March 2021.

PLL utilises its contracted capacity depending upon the requirement of RLNG by the gas utility companies. In order to optimally utilise its contracted capacity, the federal government has authorised PLL to allocate its unutilised contracted capacity to private parties, on a short-term basis, depending upon the requirement of the gas utility companies.

PLL invited the indication of interest from the interested parties seeking allocation of its unutilised capacity on a short-term basis. The unutilised contracted capacity shall be made available to all interested parties, which fulfill the eligibility criteria at Ogra determined charges for the relevant month.

PLL spokesman confirmed the development saying that in pursuance of the ECC decision and cabinet, PLL has advertised unutilised capacity seeking interest of qualified private parties which want to bring their own LNG. In this way, the market for LNG for qualified third parties is opening through PLL for its unutilised capacity. PLL will offload its capacity to private parties after meeting the requirements of gas utility companies on an as and when available basis by advertising the unutilised capacity in advance. Ogra has also circulated draft TPA code and TPA draft rules for private terminals.

The government official said that Universal Gas Distribution Company (UGDC), a private entity is all set to utilise the government’s PLL capacity in the month of October and may import LNG in the country. UGDC is already in LNG supply agreement with US based ExxonMobil and Singapore based Trafigura. ExxonMobil is also the partner with Qatar Gas Company. UGDC intends to provide the imported RLNG to the CNG sector and textile industry. An event is being arranged today (Tuesday) here in a local hotel with regard to the first ever private LNG import by UGDC under GoP initiative of Integrating Private Sector for Mitigating Gas Crises. Special Assistant to the Prime Minister on Petroleum Nadeem Babar will appear in the event as Mr Babar played an important role in using the TPA rules enabling the private companies to import and distribute LNG.