LAHORE: Associated Group Chairman Iqbal Z Ahmed has emphasised that he will meet deadlines as he works on a liquefied natural gas (LNG) terminal at Port Qasim, which will help meet future fuel demand of the private sector.
The group’s first 750mmcfd LNG import terminal, also commissioned at Port Qasim under the Pakistan GasPort consortium, was meant to provide re-gasified LNG to three Punjab-based power plants. However, under-utilisation of the terminal is being probed.
“Laws, rules and regulations for any particular deal are approved by cabinet committees and other regulators, how can an investor violate those rules,” Ahmed asked while talking to The Express Tribune.
The group’s first terminal is being investigated for not being utilised at full capacity, dispute over late commissioning penalty payment and other issues.
“We are in a contract to deliver 96% of our capacity for a whole year and if we fail we will be penalised. The same is the case with the government if it fails to utilise the signed capacity, it will have to make capacity payments,” he said.
Pakistan began importing LNG in a bid to bridge the natural gas deficit and reduce reliance on furnace oil. It started LNG imports in March 2015 and according to industry experts around 160 shipments comprising 10 million tons of LNG have been made through two terminals.
It is expected that by 2020 the demand for imported LNG will go up to 30 million tons.
Currently, Pakistan’s overall gas deficit is around three billion cubic feet per day, 25% of which is being met by importing LNG through floating storage and regasification units.
To date, two RLNG terminals have been set up by the private sector to streamline the entire process.
Ahmed was of the view that LNG was the future of Pakistan. “LNG is the only option, which can save foreign exchange, unlike furnace oil which is much costlier and coal, which has transportation, handling and environmental issues.”
The chairman said the new terminal would prove to be profitable as they were meeting their expenses from the first terminal. “We commissioned the first terminal to set a benchmark for future business, as part of our long-term plan,” Ahmed remarked.
He suggested that the government should ensure continued support and deregulate the sector for a level playing field. “There are many loopholes and the private sector’s role in LNG has yet to be defined. Free this industry and let the private sector jump in and the country will observe a stiff competition and a drop in LNG prices,” Ahmed said.
Published in The Express Tribune, November 3rd, 2018.