Flawed LNG Import Policy Exposed
Italian firm ENI asked to divert LNG cargo to the International market
By Newserman Team
Pakistan’s flawed LNG import policy has been exposed as the country continues diverting contract LNG cargoes to International market due to refusal of customers to carry it.
PML-N government had planned LNG imports and launched projects in 2015 to import gas that was meant to use in power and commercial sectors.
But all was done hastily without conducting due diligence and signing triparty contracts between customers.
Due to this, the power sector has always been reluctant to carry it. Even commercial customers were not ready to take it due to its higher prices. All gas customers wanted a local gas that was cheaper.
The textile industry had captive power plants receiving subsidized gas from the national grid. However, the government did not cut supplies to these plants following its commitment to the International Monetary Fund (IMF).
Now, it is planned that gas utilities should provide LNG to these captive power plants at full price but the textile industry was reluctant to take this expensive gas.
Therefore, due to higher prices, gas utility SNGPL informed the LNG gas importer that the power sector was not ready to consume imported gas and therefore LNG cargo should be diverted to the international market.
Now, the government has asked the Italian firm ENI to divert the fourth LNG cargo to the international market due to lower demand in Pakistan.
The Pakistan LNG Limited (PLL) had also asked the LNG exporter ENI to divert another LNG cargo to the international market which is planned in June this year.
PLL and ENI had entered into a commercial agreement for a 15-year term in 2017. Under this agreement, ENI is to provide one LNG cargo every month at 12.14 percent of Brent.
Qatar had also deferred 5 LNG cargos to 2026 due to lower demand for LNG in Pakistan. These cargoes were planned to reach Pakistan in 2025 under a long-term contract.CASA-1000 Power Project in Trouble
