ISLAMABAD: Qatar, one of the top Liquified Natural Gas (LNG) suppliers in the world, is looking to invest in an import facility in Pakistan, Pakistan’s minister for energy said on Friday.
The South Asian country has become an emerging buyer in the international LNG market over the last few years, with an increasing gap between demand and supply of gas.
Last year, State-owned QatarEnergy said it would be a shareholder in a private sector LNG terminal being set up at Pakistan’s Port Qasim, one of Pakistan’s largest ports, which is located 28 miles south-east of the country’s largest city, Karachi.
In an interview with Bloomberg, Minister for Energy Hammad Azhar said the nation imported LNG through two terminals and he expected a third site to be operational next year. Top supplier Qatar was also looking to invest in an import facility, he said, while the government wanted to set up its own import facility by converting a portion of a state-owned liquefied petroleum gas terminal.
“The current supplies are such that we can barely even meet our current customers,” the energy minister told Bloomberg. “Gas is running low in Pakistan and we have to supplement it.”
Azhar said a bill currently in parliament sought to expand access to foreign supplies to users representing about 70 percent of winter demand. Domestic gas production has fallen by about a fifth over the past two years and the bill that will allow LNG to be supplied to local customers is set to go to the upper house for approval. As LNG is more expensive than local gas, a detailed discussion on pricing will be needed, but increases won’t be “drastic,” said the energy minister.
Pakistan imports more than half of its LNG through long-term contracts, which buffers it somewhat from spot price volatility. In recent months, there have been a spate of cancelations of cargoes.
Pakistan has borne some of the brunt of Europe’s energy crisis as the region outbid rivals in China, Japan and South Korea and traders including Eni SpA and Gunvor Group Ltd. skipped cargo deliveries to the South Asian nation in recent months. One of the traders is expected to default on a cargo this month, Azhar told Bloomberg, without giving details.
The country with a population of over 200 million has struggled with energy shortages and rising power prices, with electricity still not available to 50 million people in the country who need it, according to a 2018 World Bank report.
