Construction work on first private sector LNG terminal to start in January.

ISLAMABAD -- A multinational company will start construction on first merchant Liquefied Natural Gas (LNG) terminal in the country by end of the next month [January] after the government opened up the energy sector under its ease-of-doing-business strategy.

'A vibrant structural framework is very much in place under which construction work on the first private sector LNG terminal will start by end of the January, while the physical work on another merchant terminal to commence in second half of the year 2021,' a senior official privy to the petroleum sector developments told reporter.

He said Oil and Gas Regulatory Authority was due to issue the licence for construction of a terminal within a day or two, adding all agreements, permissions and arrangements in that regard had almost been finalized.

After setting up the terminals, he said, the companies would import and sell the commodity on their own without any involvement of the government except regulation matters.

Replying to a question, the official said a formula already existed under which private sector could import LNG as per its requirements, get it injected into existing gas transmission network and receive at industrial units.

Currently, he said, two LNG terminals were operating at Port Qasim Karachi and injecting around 1,200 MMCFD gas in distribution network of Sui Northern Gas Pipelines Limited and Sui Southern Gas Company.

Replying to a query, he said the previous government itself made long term LNG import contracts at exorbitant rate involving billions of dollars financial commitments.

But, the Pakistan Tehreek-e-Insaf (PTI) government was importing additional LNG at around 20 to 25 percent reduced rate for the last one-and-half years as compared to the old deals made by the previous regime.

Explaining the government's winter gas load-management strategy, a spokesperson for the Petroleum Division has recently said that around 30 percent additional supply of Liquefied Natural Gas (LNG) had been procured for the next month [January] as compared to the same period of 2018.

'Pakistan will be moving 30 percent more LNG molecules in this January compared to January 2018, at the cheapest ever price of $6.34 [per MMBTU]for a peak winter month,' he said.

He said the government had arranged 12...

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