ABDUL RASHEED AZAD

ISLAMABAD: The Sui Northern Gas Pipelines Limited (SNGPL) has invited Expression of Interest (EOI) from local/international companies for laying 1,100 kilometers long gas pipeline project for carrying 1.2 Billion Cubic Feet per Day (BCFD) of Liquefied Natural Gas (LNG). The SNGPL, the largest integrated natural gas public sector utility company which faces serious gas shortage, is entering the final phase of the plan to start constructing a gas pipeline to transport imported LNG to facilitate 4.5 million gas consumers in Punjab and Khyber Pakhtunkhwa provinces, SNGPL officials said.

According to officials, the country is facing a severe shortage of natural gas, both for its electricity generating plants, fertilizer plants, CNG sector, industry and domestic consumers. Domestic gas production of 4.25 BCFD is insufficient to meet the country’s demand, as the supply-demand gap is approximately 2 BCFD. The shortage of energy is not only causing hardships for the people, but also inhibiting the economic growth. Therefore, the government is trying to facilitate a more secure energy supply plan for the nation. In order to overcome the natural gas shortage a number of options have been considered to deliver natural gas to the market as quickly as possible.

The officials said that Compressed Natural Gas (CNG) station owners, private power houses and industrial sector are potential clients of the imported LNG. The government of Pakistan has planned to take LNG imports within next two years to 2 BCFD mark and first LNG shipment is expected by the End of January, 2015.

According to Abid Saeed, Secretary Ministry of Petroleum and Natural Resources, the government has approved construction of LNG terminals at Gwadar Port and Port of Qasim in a bid to enhance the capacity for storage of LNG with the objective of replacing imports of the more expensive Furnace Oil (FO) and the ever increasing energy demand in the country.

According to sources privy to the developments, there is no possibility of the completion of Iran-Pakistan (IP) or Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline projects in the foreseeable future, while local gas reserves are gradually depleting. As a result Pakistan would be compelled to enhance dependence on the imported Furnace Oil to produce power. However, the government has opted to enhance reliance on the relatively cheaper LNG.

The government has decided to build an LNG terminal at Gwadar Port, for which modalities have been finalised. If the government constructs an LNG terminal in Gwadar with a total capacity of one BCFD of LNG it would cost $1 billion.

According to assessment by the Ministry of Petroleum, domestic gas production will drop from the current 4.2 Billion Cubic Feet per Day (BCFD) to 2.5 BCFD in 2019-20, unless exploration activities bear fruit.

At present, total gas shortfall is 1.88 BCFD, which would jump to 4.8 BCFD in 2019-20. To bridge the increasing gas demand/supply gap, the economic managers have planned to import up to 2 BCFD of LNG, 750 MMCFD of natural gas from Iran and 1.365 BCFD from Turkmenistan. It also wants to enhance supplies from domestic sources to meet energy needs in future, for which this year the government has awarded 50 Petroleum Concession blocks to local as well as international oil/gas exploration and production companies.

The government has allowed Elengy Terminal Pakistan Limited (ETPL) to start the construction of LNG terminal at Port Qasim Karachi which would initially handle around 400 Million Cubic Feet per Day (MMCFD) of LNG and has total capacity to handle 600 MMCFD of LNG.

The EOI applications should be submitted at below mentioned address on or before 15.01.2015 along with a pay order of PAK Rupees 10,000/- or equivalent in US $ in favor of SNGPL as processing fee which shall be non-refundable. SNGPL reserves the right to accept or reject any EOI application or cancel the tendering process at its sole discretion, if deemed necessary.