Faced with a severe power crunch, Pakistan which is planning to import LNG as a stop gap arrangement, expects the first terminal in the country at Karachi to be ready by November this year.
Speaking at the two-day Pakistan Oil and Gas 2014 summit organised by the International Research Networks (IRN) which opened on Wednesday, Petroleum and natural resources Minister Shahid Khaqan Abbasi said the demand for gas was expected to double in the next ten years and gas production at four billion cubic feet a day(BCFD) was less than the required 6 BCFD. This could rise to 8 BCFD and at the current rate of growth by 2020 the demand could touch 13 BCFD, he said.
Later talking to the media, Mr. Abbasi said the LNG deal with Qatar is yet to be approved by the federal cabinet but the contract for building the terminal in Karachi was awarded. He also said that the price of the LNG has not been finalized, contrary to media reports which said that it was pegged too high. "The price is yet to be determined and it is a government to government process. Obviously we will go for the minimum possible price," he said.
In response to questions on the differences in the Gulf Cooperation Council and if they could impact the LNG deal, he said it had no impact. Pakistan intends to import 400 mmcfd (million cubic feet a day) of LNG and apart from Qatar, it will also look at other countries for supplies.
He reiterated that the Iran-Pakistan gas pipeline was stalled due to the US sanctions against Iran and the financing too was an issue. He said the design for the project was ready and it could be executed in 36 months if the sanctions were lifted. The government was committed to this project, he added. Pakistan faces penalties of upto $ 3 million a day if the pipeline is not completed as scheduled by December 2014.
Pakistan remains a largely unexplored country with only 33 per cent of its area being covered. The new Petroleum policy in 2012 had attractive incentives for investors. He admitted that LNG imports were a short term solution to meet the country's energy needs and there was an ambitious time frame for the LNG terminal to be built by this year end. The power sector aimed at privatization of investment and Mr. Abbasi said "governments have no business to do business."