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| Pakistan Gas Market Forecast. Source: Platts |
Global LNG Market:
Pakistan, Egypt and Jordan together imported 13.9 million tons of LNG, more than the combined increase of 11.9 million tons by the most populous nations of China and India.
The biggest increase in LNG exports in 2016 came from Australia, where exports increased by 15 MT to a total of 44.3 MT. It was also a significant year for the USA, after 2.9 MT of LNG was delivered from the Sabine Pass terminal in Louisiana. Qatar remained the world’s largest LNG exporting country, accounting for around 30% of global trade of 258 MT by exporting 77.2 MT, according to International Gas Union report 2017.
LNG Demand in Pakistan:
Pakistan has been a big consumer of natural gas since the discovery of Sui gas fields in Balochistan in 1952. Sui now accounts for just 6% of natural gas domestically produced in Pakistan. The rest of the 94% comes from gas fields in other parts of Pakistan. Among the various provinces, Sindh is now the biggest producer of natural gas. Demand has risen sharply to over 6 billion cubic feet per day, far outstripping the domestic production of about 4 billion cubic feet per day.
Pakistan is currently importing 2 million MT (96 billion cubic feet) of LNG and negotiating to secure an additional 3 million MT in long-term contracts by the end of 2017 to supply its new LNG floating terminal due to arrive by December, according to M. Adnan Gilani, chief operating officer with Pakistan LNG Ltd, as reported by Platts.
New supply agreements will increase Pakistan's total LNG contracts total to more than 11 million MT per year, as the country aims to resolve a decade-long energy crisis, driven by growing gas consumption and falling domestic production.
In addition to government-to-government contracts, there are also private and public companies negotiating deals to import LNG. For example, Karachi-based power generator K-Electric is seeking supply for its 900-megawatt, $1-billion Port Qasim Power Station which will start-up in two phases, in mid-2018 and the end of 2019, according to Reuters news agency.
In the longer term, Pakistan aims to allocate a quarter of its LNG purchases to the spot and short-term markets, Pakistan LNG Ltd's Adnan Gilani told Platts. "Initially, our goal is to solve our energy crisis. We have long-term downstream commitments, so we do not mind going to mid-to-long term initially," he said. "Over the course of time, we will be able to cater to our variable non-cyclical demand... and allocate about a quarter of our portfolio to spot and short term. PLL is currently purchasing four cargoes per month on a short-term basis as it awaits the start of new term volumes.
By 2022, Pakistan expects to import 30 million MT (1,440 billion cubic feet) of LNG, according to Adnan Gilani of PLL.
LNG Infrastructure:
There is one LNG terminal currently operational at Port Qasim and 5 more are planned in Pakistan over the next two years to deal with rising volume of LNG imports. New pipelines are planned by South Sui Gas and Northern Sui Gas companies to transmit regasified LNG to various parts of the country to meet demand.
Summary:
Pakistan is among the fastest growing LNG markets, according to Shell 2017 LNG report. The country has suffered a crippling energy shortage in recent years as demand has risen sharply to over 6 billion cubic feet per day, far outstripping the domestic production of about 4 billion cubic feet per day. Recent LNG imports are beginning to make a dent in Pakistan's ongoing energy crisis and helping to boost economic growth. Current global oversupply and low LNG prices are helping customers get better terms on contracts.
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Pakistan's LNG demand expected to reach 30 mil mt/year by 2022: PLL
Singapore (Platts)--16 Feb 2017 1025 pm EST/325 GMT
Pakistan plans to ambitiously grow its LNG imports over the next few years, Adnan Gilani, the chief operating office of Pakistan LNG Ltd. (PLL), re-affirmed at the LNG Supplies for Asian Market (LNGA) conference in Singapore this week.
PLL expects Pakistan's 3.5 million mt/year (465 MMcf/d of gas equivalent) of LNG imports in 2016 to rise dramatically to 20 million mt/year in 2018 and 30 million mt/year by 2022, Gilani said.
He added that the country views LNG as a short-to-medium term solution for meeting a projected gas shortfall of 2-4 Bcf/d, depending on assumption scenarios used.
The country's gas shortfall recently culminated in a gas crisis in 2015, resulting in under-utilized gas-fired power plants, compensated for by expensive oil imports for power, and the country's fertilizer and textile sectors suffering shutdowns, Gilani said.
https://www.platts.com/latest-news/natural-gas/singapore/pakistans-lng-demand-expected-to-reach-30-mil-27771003
Of course, Pakistan is a new entrant. This is a play on statistics. Going from 1 to 2 is 100% increase but going from 50 to 75 is only 50% - but it has increased in VOLUME by 25 compared to just 1.
Siemens has received an order from Pakistan for a complete power island for the new combined cycle Punjab Power Plant Jhang. The order was placed by the China Machinery Engineering Corporation (CMEC). As EPC contractor the Chinese company is building the project for the independent energy provider Punjab Thermal Power (Pvt) Ltd (PTPL). The liquefied natural gas (LNG)-operated plant is being built 250 kilometers southwest of Lahore and will provide a power generating capacity of 1.3 gigawatts.
The power island from Siemens includes two SGT5-8000H gas turbines, one SST-5000 steam turbine, two heat recovery steam generators as well as control and auxiliary systems. Siemens will also be responsible for engineering and project management as well as for the associated on-site services. The power plant will initially feed electricity in simple-cycle operation in December 2018. It will then take up combined cycle operation in November 2019. The order for Siemens is valued at approximately 200 million euros.
The H-class has been successfully proven in operation, and Siemens has sold 84 of these machines to date. With 47 turbines in commercial operation, the H-class has now completed approximately 500,000 operating hours with an average reliability of approximately 99 percent.
http://www.pennenergy.com/articles/pennenergy/2017/10/siemens-receives-power-plant-order-from-pakistan.html
#Pakistan discovers its largest #oil and #gas reserves in #Punjab near Attock. #energy
https://www.thenews.com.pk/latest/234489-POL-discovers-largest-reserves-of-oil-and-gas
Pakistan Oil fields Limited (POL) had discovered one of the largest oil and gas reserves from its Jhandial well (Punjab) in the last five years.
Jhandial well is located in Ikhlas Block in Northern Potwar, about 83 kilometers Southwest of Islamabad in District Attock, said an official.
POL holds 80% share in the block whereas The Attock Oil Company (AOC) has a 20% share.
The block is located in a prospective but geologically complex area surrounded by a number of significant oil discoveries.
The drilling of the deep exploratory well Jhandial-1 was proposed after acquisition and interpretation of recently acquired 3D seismic data.
The well was drilled to a total depth of 18,497 feet to test the Eocene and Paleocene carbonate reservoirs.
During testing, significant amount of hydrocarbons (oil and gas) were encountered in the Sakessar, Nammal (Eocene) and Patala (Paleocene) formations with flow rates of 21 million cubic feet of gas and 2,520 barrels of oil per day at choke size of 40/64"at well head flowing pressure of 3,768 psi, 19 million cubic feet of gas and 2,160 barrels of oil per day at choke size of 32/64"at well head flowing pressure of 5,364 psi and 16.5million cubic feet of gas and 1,630 barrels of oil per day at choke size of 28/64"at well head flowing pressure of 6,290 psi.
The American Petroleum Institute (API) gravity of the oil is around 40o and the gas has a rich calorific value of 1,161 British Thermal Units per standard cubic feet of gas.
The gas composition analysis indicates that it contains about 86% methane, 7.2% ethane and 2.9% propane. The LPG content of the gas is about 2.5 metric tons per million cubic feet of gas.
The well will be connected to the production line within two weeks and will gradually attain full potential.
Structurally, Jhandial is a thrusted anticline just north of the Dhurnal Oil field. It has a closed area of about 15 square kilometers in the most likely case, with a thick net reservoir column from top of the Chorgali Formation (Eocene) to the base of the Paleocene Formation.
Preliminary initial estimated recoverable reserves of the field are in the range of at least 292 billion standard cubic feet of gas and 23 million barrels of oil.
The Jhandial discovery is expected to contribute to the country's energy sustainability while also having a positive impact on the future of exploratory efforts in the block and surrounding areas.
#LNG revolutionizing #Pakistan’s #energy sector. #gas #CNG
https://tribune.com.pk/story/1526272/bridging-energy-shortfall-lng-revolutionising-pakistans-energy-sector/
If one looks at Pakistan’s print and electronic media, it would appear that nothing has gone right for the liquefied natural gas (LNG) projects in the country. However, the rest of the world has a completely different view of the matter.
They marvel as to how quickly the government of Pakistan was able to sign contracts at the most economical prices, build LNG terminals and other infrastructure, and actually begin using the gas to alleviate severe energy shortages.
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Already some results are becoming evident. The most obvious effect has been on the use of compressed natural gas (CNG) in automobiles. Almost 75% of around 3,200 CNG pumping stations operating in 2012 have restarted their operations, according to the All Pakistan Compressed Natural Gas Association.
Pakistan was amongst the top CNG-user countries with 3.7 million CNG-run vehicles before 2012. Since LNG is at least 30% more economical to use, its availability to automobiles will result in considerable savings for consumers as well as the government. The other advantage is that CNG is a cleaner fuel.
It is not just transport and power sectors that are the major beneficiaries, other sectors benefit as well. Gas is used as raw material in the manufacture of fertilisers and this year Pakistan has become a net exporter rather than an importer of the commodity.
It is time other sectors such as Railways start planning to switch from diesel-run locomotives to LNG. This would save 40-60% of fuel cost.
Our obsolete furnace-oil based power plants should be replaced by more energy-efficient LNG-based plants as is already being done in India. This is expected to save $1.5-2 billion in foreign exchange annually.
With the availability of cheaper fuel, Pakistan’s competitiveness will increase, resulting in revival of exports and the overall economy.
With the completion of the China-Pakistan Economic Corridor (CPEC) early harvest projects, and no energy worries, the incoming government in 2018 would inherit a Pakistan different than what it was only four years ago.
Fleeing #India foreign institutional #investors heading straight to #Pakistan; heres why. #KSE100 http://ecoti.in/9McAza via @economictimes
After losing a quarter of its value in five months as the prime minister was ousted over corruption charges and the current-account deficit ballooned, Pakistan’s stock market is starting to look cheap to foreign funds.
The market is definitely oversold and it’s a good time to buy, said Mohammed Ali Hussain, a senior analyst in Dubai at Frontier Investment Management Partners Ltd. The shares have now fallen enough to compensate for the risk of a rupee devaluation and look attractive ..
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Beset by political turmoil and an increasingly precarious macroeconomic position, Pakistan has seen $402 million of stocks outflows this year even as the country was restored to emerging-market status by index provider MSCI Inc. But with an economy supported by Chinese President Xi Jinping’s “ One Belt One Road” infrastructure push and average valuations that have fallen to around half the level of Indian shares, sentiment is turning.
Read more at:
//economictimes.indiatimes.com/articleshow/61182075.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
World Bank report: Hydro important part of private infrastructure development in Pakistan
http://www.hydroworld.com/articles/2017/10/world-bank-report-hydro-important-part-of-private-infrastructure-development-in-pakistan.html
A recent report on private investment in infrastructure development, released by the World Bank Group, offers some insights into hydro, including the fact that investments in two hydropower plants in Pakistan helped boost that country into the top five.
The January-June 2017 Private Participation in Infrastructure Half Year Update cites investments in hydropower in Pakistan worth US$1.9 billion and US$1.7 billion and says the country was a new entrant to the list of top five countries for private participation in infrastructure. Other countries in the top five are Indonesia, Jordan, Brazil and China.
In Pakistan, the US$1.9 billion investment is for the 870-MW Suki Kinari Hydropower Plant. Suki Kinara is on the Kunhar River in the Mansehra district of Khyber Pakhtunkhwa and is expected to be completed by 2021.
The US$1.7 billion investment is for the 720-MW Karot Hydropower Plant. The Karot project, on the Jhelum River east of Islamabad, is being developed under Pakistan’s Power Policy of 2002. The first units are expected to go on line in 2020.
A section of the report discusses the energy sector, which was “the most dominant sector for H1 [first half] 2017 investment, accounting for three-quarters of global investments.” The report indicates that, by capacity, hydro projects led the way with cumulative capacity of 1.9 GW.
Of all the private participation in the energy sector in the first half of 2017, 85% was in renewables, and 15% of that 83% was hydropower.
JANUARY – JUNE
2017
Private Participation
in Infrastructure (PPI)
HALF YEAR UPDATE
https://ppi.worldbank.org/~/media/GIAWB/PPI/Documents/Global-Notes/PPI2017_HalfYear_Update.pdf
Indonesia was the destination for the highest amount of PPI investment, while Pakistan and
Jordan were new entrants to the top five countries, joining Indonesia, Brazil, and China.
Indonesia, Pakistan, and Jordan are amongst the top five highest PPI-investment countries because
of a few multibillion-dollar power projects. Indonesia saw investments in US$ 4.2 billion and US$2.2
billion coal fired power plants, Jordan had a US$2.1 billion investment in an oil shale-fired power
plant, and Pakistan had investments in two hydropower plants worth US$1.9 billion and US$1.7 billion.
Exclusive-Exxon Exit Deals Blow to Pakistan Plans for LNG Imports
https://www.nytimes.com/reuters/2017/10/30/business/30reuters-pakistan-lng-exxon-mobil.html
Exxon Mobil has pulled out of a major project in Pakistan, in a potential blow to plans to boost imports of liquefied natural gas (LNG) after years of winter shortages.
Differences among the six-member group behind the project in Port Qasim in Karachi mean French oil major Total and Japan's Mitsubishi may also quit and join a rival scheme, government officials and industry sources told Reuters.
A senior Pakistani government official put the chances of success for the project, set to be Pakistan's third and biggest by import capacity, at 10-20 percent due to the disagreements.
A highly-developed pipeline grid, extensive industrial demand and the biggest natural gas-powered vehicle fleet in Asia after China and Iran make Pakistan an easy fit for LNG and official estimates show imports could jump fivefold to 30 million tonnes per annum (mtpa) by 2022.
The new project would include a floating storage and regasification unit (FSRU), where LNG will be converted back into gas for feeding into the country's grid.
Qatar Petroleum [QATPE.UL], the world's biggest LNG producer, Turkish developer Global Energy Infrastructure Limited (GEIL) and Norway's Hoegh LNG, which will provide the FSRU, are the other partners.
While Exxon has pulled out, the U.S. company was now negotiating to join a separate project, Hasil Bizenjo, Pakistan's Maritime Affairs minister in charge of ports, said.
"They are thinking to build a new terminal in Port Qasim," Bizenjo told Reuters in the Pakistan capital Islamabad, adding that Mitsubishi and Total were also in talks about taking stakes in another consortium.
Exxon was pulling out because it had "issues with partners", particularly the developer, GEIL, one energy official said. Exxon's move leaves in doubt a multi-billion dollar deal Qatar has already struck with GEIL for the sale of up to 2.3 million tonnes of LNG annually over 20-years.
Exxon Mobil, Total and GEIL declined to comment, while a Mitsubishi spokesman said that the Japanese company has been continuing its talks with partners over the project.
Qatar Petroleum did not respond to requests for comment.
NEW INVESTORS?
LNG imports have transformed Pakistan's energy map since the country's first import facility was introduced in 2015.
If the second LNG terminal proceeds without glitches the South Asian nation will not suffer winter gas shortages for the first time in more than 10 years, energy officials say, in a likely boost for Prime Minister Shahid Abbasi's ruling party before the next general elections, due in mid-2018.
Government officials and industry sources said talks are underway to bring new players into the project, including Swiss trading house Vitol [VITOLV.UL], which declined to comment.
Rival traders Trafigura and Gunvor are already developing LNG projects in Pakistan, betting the country will account for a rising share of future profits and LNG trade.
Pakistan plans to add its second LNG import terminal by the end of this year, but private companies have proposed building six more largely around Port Qasim.
'Spectacular' drop in renewable energy costs leads to record global boost
Falling solar and wind prices have led to new power deals across the world despite investment in renewables falling
https://www.theguardian.com/environment/2017/jun/06/spectacular-drop-in-renewable-energy-costs-leads-to-record-global-boost
Renewable energy capacity around the world was boosted by a record amount in 2016 and delivered at a markedly lower cost, according to new global data – although the total financial investment in renewables actually fell.
The greater “bang-for-buck” resulted from plummeting prices for solar and wind power and led to new power deals in countries including Denmark, Egypt, India, Mexico and the United Arab Emirates all being priced well below fossil fuel or nuclear options.
Analysts warned that the US’s withdrawal from the Paris climate change agreement, announced last week by Donald Trump, risked the US being left behind in the fast-moving transition to a low-carbon economy. But they also warned that the green transition was still not happening fast enough to avoid the worst impacts of global warming, especially in the transport and heating sectors.
The new renewable energy capacity installed worldwide in 2016 was 161GW, a 10% rise on 2015 and a new record, according to REN21, a network of public and private sector groups covering 155 nations and 96% of the world’s population.
The new record capacity cost $242bn, a 23% reduction in investment compared to 2015, and renewables investment remained larger than for all fossil fuels. Subsidies for green energy, however, are still much lower than those for coal, oil and gas.
New solar power provided the biggest boost – half of all new capacity – followed by wind power at a third and hydropower at 15%. It is the first year that the new solar capacity added has been greater than any other electricity-producing technology.
“A global energy transition [is] well under way, with record new additions of installed renewable energy capacity, rapidly falling costs and the decoupling of economic growth and energy-related carbon dioxide emissions for the third year running,” said Arthouros Zervos, chair of REN21.
#Pakistan’s private sector to get new #LNG terminal
http://www.gulf-times.com/story/574696/Pakistan-s-private-sector-to-get-new-LNG-terminal
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Pakistan’s domestic gas production capacity is approximately 4bn cubic feet per day (bcfd), while demand is more than 6bn bcfd, resulting in a growing shortfall of gas which is expected to worsen in the coming years. An estimate said the gap between demand and supply is projected to double by 2020.
A consortium comprising local and foreign business houses is poised to set up Pakistan’s first liquefied natural gas (LNG) terminal that would be dedicated to energy-starved private sector, industry officials said yesterday.
The officials said that the consortium consisting of Fatima Group, Shell Gas BV, Gunvor Group Ltd and Engro Elengy Terminal Ltd would set up the terminal with a capacity to regasify 600mn metric cubic feet per day in ‘near future’. It would enable private buyers to buy RLNG on competitive price.
At present, the two LNG terminals operated by Engro Elengy and Pakistan GasPort Consortium Ltd – with 1.2bn cubic feet per day capacity – are mainly catering to the need of RLNG-based power plants of the government.
The present domestic gas production capacity is approximately 4bn cubic feet per day (bcfd), while demand is more than 6bn bcfd, resulting in a growing shortfall of gas which is expected to worsen in the coming years. An estimate said the gap between demand and supply is projected to double by 2020.
The increasing trend in demand will continue to pose challenge despite initiative taken by the government that led to injecting of RLNG into domestic network in early 2015.
Official said the new consortium has shown commitment to start work on LNG terminal in view of the government’s encouraging policies.
“This initiative will boost imports of much-needed LNG for the energy-starved private sector,” an official said.
Officials said the new LNG partnership will help in further reinforcing energy security of the country by reducing demand supply gap with provision of one of the cheapest fuels on competitive terms.
An independent private LNG market will encourage competition as private buyers and sellers will truly create a viable energy market, they added. Gas shortages resulted in extreme stress to economy during the last decade. The industrial and commercial sectors have especially been bearing the brunt of chronic energy shortages.
The shortfall directly affected as many as 500,000 households, while it also caused shutdown of industries or slowdown in production, causing unemployment, according to an estimate. Particularly, export-oriented sectors are badly hurt by energy and power crisis that led to loss of export revenue.
More than 2,500 megawatts of power projects were brought online or switched from expensive liquid fuels with the injection of imported RLNG, while 750 plus compressed natural gas stations commenced operation in the Punjab alone, creating a new hope of survival for $4.5bn industry.
Furthermore, the revival of more than 500 industrial units mainly comprising of export-oriented textile could be made possible due to LNG supplies.
Similarly, the robust fertiliser industry that was plagued by non-availability of natural gas could only be revived after RLNG supplies. Consequently, the fertiliser industry has witnessed an increase of 1mn tonnes in production.
LNG is one of the most rapidly expanding energy commodities globally due to its obvious economic and environmental advantages. Global LNG trade reached an all-time high of 260mn tonnes in 2016.
The sector’s 10-year compound annual growth rate stands at 5%. The world’s regasification capacity stood at 820mn tonnes per annum last year.
#Russia eyes opportunities for #energy cooperation with #Pakistan. #LNG #Pipeline
http://tass.com/economy/990860
Russia sees good opportunities for trade and economic cooperation with Pakistan, primarily in energy, Russian Foreign Minister Sergey Lavrov said on Tuesday, opening talks with his Pakistani counterpart Khawaja Muhammad Asif on Tuesday.
"We have good opportunities in trade and economic cooperation, investment cooperation, most notably in energy, given that the significant part of this sector in your country was created with the assistance of our specialists," Lavrov said.
"One of priority areas of our cooperation is anti-terror fight," Lavrov said. "We expect to continue providing assistance in enhancing your country’s potential to fight terrorism," he stressed.
The Pakistani foreign minister said he saw opportunities for bilateral cooperation in military, technical and banking sectors. He congratulated Lavrov on the 70th anniversary of establishing diplomatic ties between Pakistan and Russia, voicing hope to step up cooperation.
Moscow and Islamabad will establish a commission on military cooperation, he said.
"A commission on military cooperation is being formed," Lavrov said. "We have confirmed Russia’s readiness to continue boosting Pakistan’s counterterrorism capacity, which is in the entire region’s interests," the Russian top diplomat added.
"Last year, we handed four Mil Mi-35M combat and cargo helicopters over to our partners," he went on to say. "I am sure that they have been in demand as far as counterterrorism operations go, as our colleagues told us today," the Russian foreign minister noted.
Russia and Pakistan will continue the practice of organizing Druzhba (Friendship) joint tactical drills. "We have decided to continue the practice of organization of joint tactical exercises Druzhba to drill skills of counter-terrorist organizations in mountainous conditions," he said. "Such drills were conducted last autumn in Russia’s Karachay-Cherkessia."
More:
http://tass.com/economy/990860
Pakistani Government seeks to reduce supplies as demand for LNG fades
https://www.hellenicshippingnews.com/pakistani-government-seeks-to-reduce-supplies-as-demand-for-lng-fades/
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As a consequence, the LNG throughput handled by PLL from Gasport Terminal would be reduced from 300 million cubic feet per day (mmcfd) to 200mmcfd while PSO would reduce supply from Engro Elengy Terminal from 600mmcfd to 500mmcfd.
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All the three LNG projects were required to achieve commercial operation date (COD) on combined cycle by December 2017 under revised schedule instead of original schedule of June-August 2017, but are yet to reach that stage, he said. One of the plants may achieve COD on March 7, he added.
He said the LNG off-takers were either not ready or a few others had lower requirement for LNG while pipelines and storages were fully packed and hence the only option left was to reduce throughput from both terminals.
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The meeting was attended by Minister for Power Sardar Awais Ahmed Khan Leghari, Finance Adviser Miftah Ismail, Special Assistant to the PM Barrister Zafarullah Khan, federal secretaries senior officials of divisions concerned. The meeting was also “briefed on demand and supply situation and the power generation projections from March till October 2018”.
Interestingly, the LNG supply jack up was particularly based on power plants’ requirement. The Central Power Purchase Agency (CPPA) and National Transmission & Despatch Company (NTDC) have been giving gas demand of up to 900mmcfd, but actual consumption in the sector has been less than 500mmcfd.
For February, the power sector has been committing LNG offtake of 700mmcfd, but the supply remained less than 400mmcfd and some quantities were diverted to the domestic sector besides the industry.
Under revised schedules, the Petroleum Ministry official said the two LNG projects of the federal government namely Haveli Bahadar Shah and Balloki and Qaid-i-Azam Power Plant (Bhikki plan) of Punjab government have confirmed combined cycle commissioning in early March (all three having 1,200MW).
The three plants were to get firm supply of RLNG from December/January for combined cycle testing but they have so far failed to scale up supplies due to repeated technical failures.
In fact, the three were to start single cycle operations over one year ago for which two LNG terminals were set up and LNG import arrangements were put in place at the expense of millions of dollars of the taxpayer money. The plants were to make ‘take or pay’ payments to LNG importers under back-to-back agreements in case of non-consumption of RLNG even in single cycle phase.
However, the stakeholders in the supply chain have refrained from ‘take or pay’ settlement under orders of the PM Office to spread the losses across the chain instead of cost build up in LNG power plants to avoid Nandipur Power project-like cost escalations. The cost, therefore, shift to PSO, LNG companies and Sui gas companies besides the consumer at large. LNG terminal operators like Elengy and Gasport are qualified to claim full payments that increases the processing cost because of lower utilisation factor.
Interestingly, chief executive of Qaid-i-Azam LNG project Ahad Cheema was picked up by National Accountability Bureau (NAB) in a different case when his first plant at Bhikki was in final stage of testing and he had been entrusted to undertake fourth LNG project of 1,200MW at Trimmu when it had become clear that enough generation capacity had been contracted.
In the meanwhile, a number of low-cost generation project based on coal and hydropower have come on line like coal-based project at Sahiwal contributing 1,300MW, Port Qasim coal plant 600MW and expected to go up to 1,300MW soon. Additional nuclear power capacity of around 800MW is likely to be commissioned this summer while Tarbela-4th extension will give enhanced supplies in summer, followed by Neelum-Jehulm.
Exxon Mobil Partnering With #Pakistan for Third #LNG Terminal. #energy
https://www.bloomberg.com/news/articles/2018-03-16/exxon-mobil-partnering-with-pakistan-for-its-third-lng-terminal
Exxon Mobil Corp. is working with a group of Pakistan’s large businesses on a proposal to build and supply the country’s third import terminal for liquefied natural gas, according to the nation’s minister for maritime affairs.
Exxon has partnered with Pakistani consortium Energas to develop the import terminal, the minister, Mir Hasil Khan Bizenjo, said by phone Friday, without providing further details. An Exxon spokesman in Singapore wasn’t immediately able to comment.
According to a presentation the companies made to the country’s regulators Thursday, a copy of which was obtained by Bloomberg, the group plans to start building a $150 million offshore terminal at Port Qasim near Karachi in May, pending government approvals. Exxon and Qatar would supply LNG to the terminal, which is expected to be completed by the end of 2019, according to the presentation.
With a population of more than 200 million and an economy growing above 5 percent, Pakistan has the largest appetite for LNG among emerging markets, according to Bloomberg New Energy Finance. The nation’s domestic gas production has remained stable for more than a decade despite growing demand.
The terminal will have throughput capacity of 750 million cubic feet a day of gas, or about 5.6 million tons a year of LNG, according to the presentation. Exxon and Energas already have customers for about 300 million cubic feet a day of gas including power plants, it said.
Energas is a consortium of large Pakistani businesses looking to secure long-term gas supply on preferential terms, including Yunus Brothers Group, which owns Lucky Cement Ltd., and Sapphire Group.
#LNG imports in #MiddleEast plummeting. 37% slump in 2018 & prolonged negative outlook is in contrast to region’s 2-year LNG #gas demand surge. Oil prices barely enough to balance the budget of #Gulf monarchies of #SaudiArabia, #UAE, https://www.bloomberg.com/news/articles/2019-01-30/the-middle-east-s-once-hot-lng-market-faces-a-decade-long-slump via @markets
The Middle East was a bright spot for global liquefied natural gas demand in 2015. Now imports have plummeted so much that it could take a decade to recover.
Last year’s 37 percent slump and the prolonged negative outlook is in contrast to the region’s two-year LNG demand surge that outpaced global growth, according to BloombergNEF and ship-broker Poten & Partners Inc. data. The Middle East is now expected to make up less than 4 percent of global imports for at least eight years.
There are only five importers -- Egypt, Kuwait, Jordan, the United Arab Emirates and Israel -- of LNG in the Middle East. Bahrain is expected to join the group this year.
Why are LNG imports falling?
Gas finds in Egypt and the U.A.E. reduced the need for the liquefied fuel, and Jordan increased cheaper pipeline imports. “Domestic gas resources have been the main reason for LNG imports being subdued,” said Fauziah Marzuki, a senior associate at BNEF. Locally produced “gas will always be preferred over imports, within certain cost parameters of course.”
Which countries are leading the decline?
Egypt, the region’s biggest LNG importer in 2016 and 2017, will halt purchases this year and may resume exports thanks to surging domestic supplies from the giant Zohr field. Jordan will rely more on pipeline imports from Egypt, trimming its need for LNG. Bahrain, the only country that will add import capabilities in 2019, isn’t expected to reach meaningful volumes until 2022, according to BNEF forecasts.
Fizzling Gas
Liquefied natural gas imports in the Middle East had a record drop in 2018
What does this mean for Qatari exports?
Qatar, the world’s biggest LNG exporter, has boosted its position in the Middle East’s shrinking market since 2016. The exit of Egypt from the scene will likely erode that status. Almost half of Egypt’s imports came from Qatar last year. Still, the region isn’t a major market for Qatar and growth in Asia will more than offset declines in the Middle East.
How will this impact global markets?
Imports of LNG in the Middle East are dwarfed by Asia. Supply of the fuel -- driven by the U.S., Qatar and Australia -- is expected to rise almost 18 percent by 2030, and demand will grow more than double that rate. Even Kuwait, the region’s biggest importer, barely registers in global terms. Its imports are even less than the smaller markets in Asia such as Thailand, Bangladesh and Pakistan.
LNG Minnow
Middle Eastern countries to comprise just 3 percent of global demand in 2019
#Pakistan #LNG #demand could triple over next 3-5 years Last year LNG imports were 7 tons of LNG. This year, that could grow to as high as 15 million tons and to up to 25 million to 30 million tons over the next 3 to 5 years. #energy #oil #gas #economy https://energy.economictimes.indiatimes.com/news/oil-and-gas/pakistan-lng-demand-could-triple-over-next-3-5-years/68281233
SINGAPORE: Pakistan's demand for liquefied natural gas (LNG) could more than triple in the next three to five years, the chief executive of Pakistan LNG said on Wednesday.
Last year, Pakistan imported nearly 7 tonnes of LNG, data from Refinitiv Eikon shows. This year, that could grow to as high as 15 million tonnes and to up to 25 million to 30 million tonnes over the next three to five years, said Adnan Gilani, managing director and chief executive of Pakistan LNG.
Pakistan LNG is a state-owned company that buys LNG from the international market to supply to the domestic market.
Both of the country's existing LNG terminals are currently nearly fully utilised. Another two are expected to announce a final investment decision this year.
Pakistan's two import terminals have a regas capacity of 1.2 billion to 1.3 billion cubic feet of gas per day, or about 9 million to 10 million tonnes of LNG a year, according to Gilani's presentation at the LNGA 2019 conference in Singapore.
Pakistan is expected to negotiate a few more long-term contracts to import LNG into the country, Gilani said.
Pakistan is facing a serious energy crisis with repeated blackouts and gas supply outages that led to the sacking of the heads of two of its main gas distribution utilities in January.
#Qatar emerges as front-runner for long-term #LNG deal for #Pakistan, one of the world’s fastest growing LNG markets. Pakistan is seeking long-term supply contracts for second LNG terminal, which can receive 600 million cubic feet per day of natural gas. https://reut.rs/2IHTHzT
Qatar has emerged as the front-runner for a long-term gas supply deal to Pakistan, a senior Pakistani official said on Friday, with the cabinet of Prime Minister Imran Khan set to decide in the coming weeks on an agreement.
Pakistan, with 208 million people, is running out of domestic gas and has turned to liquefied natural gas (LNG) imports to alleviate chronic energy shortages that have hindered its economy and led to a decade of electricity blackouts.
Qatar is already Pakistan’s biggest gas supplier after signing a 15-year agreement to export up to 3.75 million tonnes of LNG a year to the South Asian country. That 2016 deal supplied Pakistan’s first LNG terminal.
Emerging as one of the world’s fastest growing LNG markets, Pakistan is looking to secure a long-term supply contracts for its second LNG terminal, which can receive 600 million cubic feet per day (mmcfd) of natural gas.
Pakistan has already signed a five-year import deal with commodity trader Gunvor and a 15-year agreement with Italy’s Eni, but is seeking long-term agreements for about 400 mmcfd.
Pakistan has been negotiating with eight countries with whom it has signed inter-governmental agreements in recent years, including Qatar, Russia, Turkey, Italy, Oman, Azerbaijan, Malaysia, and Indonesia. A Saudi Arabian delegation representing state-owned Saudi Aramco has also shown interest in a gas deal.
The senior Pakistani official told Reuters that state-run Qatargas put forward the lowest bid for a long-term LNG supply contract that would have a price review after five or 10 years.
“Qatar has offered the lowest price,” said the official, declining to say the amount of LNG or the price offered by Qatar.
Pakistan’s cabinet is in the next week or two expected to decide if it will proceed with a government-to-government deal, when it will also decide on the size, he said.
Cash-strapped Pakistan is most likely to go with the cheapest supplier, in this case Qatar, officials have said. However, the government may choose more expensive rates to bolster its relations with a chosen country.
Khan’s cabinet could also choose to put out an open tender for long-term agreements, said the senior official. However, some energy officials believe direct government-to-government deals could offer better rates than tendering.
The Pakistani official added that Saudi Aramco may sign a long-term supply deal with Pakistan, potentially also providing some of the 400 mmcfd available at the second terminal. (Reporting by Drazen Jorgic; editing by Christian Schmollinger)
Powering #Pakistan. There is enough #coal at #Thar to cater for the #energy needs of the nation for two centuries. Imported #LNG #gas costs about 40% higher than Synthetic Natural Gas (#SNG) produced from Thar Coal. #power #electricity https://www.pakistantoday.com.pk/2019/07/15/powering-pakistan/#.XS3_3iOqyAc.twitter
BY DR FARID A MALIK
Pakistan is finally on the world Coal Map. On July 08, 2019 power generated from Thar Coal entered the national grid; electricity is now being produced by combustion of the local Lignite. At 175 billion tons this is one of the largest coal deposits of the world. The coalfield is spread over 9,000 square kilometers. It was discovered in 1996 by a joint investigation of Geological Survey of Pakistan (GSP) and United States Geological Survey (USGS). It is an important milestone, now that power can be generated by using indigenous fuel. Currently I am working on building an energy system based on this coal by using 21st century technologies.
In 1952 another important event took place when natural gas was discovered at Sui. With 12 trillion cubic feet (TCF) this was the largest deposit of its time. The Government of Pakistan (GoP) established a joint venture company called Pakistan Petroleum Limited (PPL) that pumps out gas from this resource. Two public sector companies distribute gas across the country. Sui Northern Gas Pipelines Limited (SNGPL) brings gas upcountry to Punjab and KP while Sui Southern Gas Company (SSGC) covers Sindh and Balochistan. The pipeline is spread over 20,000 kilometers, it is a state of the art system designed and built by local expertise. For fifty years (1952 to 2002) the energy needs of the nation were catered for by this source. Unfortunately due to misuse and mismanagement the resource has been depleted before its time. It is down to 2TCF now. Gas is being imported from Qatar to meet the shortfall of about 2000 mmcfd. The price of this imported gas at $11.4 per mmbtu is unaffordable. In the US this gas is sold at $3 per mmbtu.
Sui Gas was the energy gift of the founding fathers of Pakistan while Thar is our contribution to the coming generations which will long be cherished and utilised
There is enough coal at Thar to cater for the energy needs of the nation for two centuries. This resource can power Pakistan to prosperity. Mining of coal was the major challenge which has been overcome by a joint venture company formed by ENGRO and Government of Sindh (GoS) called SECMC (Sindh Engro Coal Mining Company). Coal is mined and then delivered at site to a power generation company called ENGRO Powergen Thar.
As Chairman Pakistan Science Foundation (PSF), I started working on the development of Thar Coal in 2004. In August 2018, after 14 years I stood at the bottom of the mine to touch the black gold for the first time. It was a dream come true. Sui Gas was the energy gift of the founding fathers of Pakistan while Thar is our contribution to the coming generations which will long be cherished and utilised.
No nation can prosper without covering its energy needs. Imported fuel cannot ensure sustainability. Rising costs of power and gas have substantially increased the cost of production rendering our exports non-competitive. The fuel advantage that we once had no longer exists. The black gold at Thar can revive the much needed competitiveness. Coal is being mined in Block II by SECMC while a Chinese consortium has started to dig in Block I. Thar Coal Energy Board (TCEB) has thus far demarcated 14 blocks for exploration.
Imported Liquefied Natural Gas (LNG) costs about 40% higher than Synthetic Natural Gas (SNG) produced from Thar Coal. Above ground gasification after mining is an established technology. There are several plants in Germany, South Africa, China and the US where coal is being used to produce multiple products that include; gas, fertilizer, diesel and chemicals. Pakistan can benefit from this know how that already exists.
#Italian, #Chinese major petroleum companies vie in #Pakistan's mega #LNG tender worth $5 billion to $6 billion. Pakistan to be a big growth driver in global LNG demand. Wood Mackenzie estimates the country will need 25 million tonnes a year. #energy #gas https://reut.rs/2LB7SbJ
Eni and PetroChina’s Singapore unit were joined by the trading arm of Azeri state oil company SOCAR and commodities trader Trafigura in placing offers, the sources said.
Pakistan LNG, the state-owned company that issued the tender, declined to name any bidders.
“The technical bids for our long-term LNG supply tender were received and opened yesterday. Evaluations are underway,” it said.
SOCAR Trading SA confirmed it had bid. Trafigura said it does not comment on tenders. A spokesperson noted Trafigura was a stakeholder in the terminal due to receive the tendered LNG.
“Trafigura owns 150 (million cubic feet a day) of LNG import capacity in that facility, which is key to its plan to supply LNG and gas to Pakistan’s private sector,” the spokesperson said.
#China Bids Lowest #LNG Price to #Pakistan Amid Massive #Gas Glut In #Asia. PetroChina International Singapore Quotes 8.594% of Brent oil contract for a delivery on February 16-17, 2020. #energy | OilPrice.com https://oilprice.com/Energy/Gas-Prices/China-Dumps-LNG-Amid-Massive-Glut-In-Asia.html?utm_source=tw&utm_medium=tw_repost #oilprice
PetroChina, one of the largest buyers of liquefied natural gas (LNG) in the key LNG demand growth market, has offered the lowest bid in an LNG tender in Pakistan, in a sign that the Asian market continues to be oversupplied even after the winter heating season began.
According to the documents from the latest Pakistan LNG tender, PetroChina International Singapore offered the lowest bid at a price slope—that is a percentage of the Brent oil contract—of 8.594 percent, for a delivery window on February 16-17. PetroChina beat commodity traders Gunvor and Trafigura and the trading arm of SOCAR to the lowest bid in the Pakistani tender.
It’s not certain if Pakistan will award this tender, because it sometimes chooses not to buy. But the fact that China is offering LNG so cheaply points to the persistent LNG glut on the Asian markets.
According to Bloomberg, this was at least the second time in which PetroChina has offered the lowest bid in an LNG tender in Pakistan.
This year, Asian spot LNG prices are at their lowest ever for this time of the season.
Last week was the first week since October in which spot LNG prices in Asia increased week on week. Asian LNG spot prices for delivery in January rose to US $5.65 per million British thermal units (MMBtu) last week, up by 15 cents from the previous week, trading sources told Reuters.
Still, prices were at their lowest for this time of the year, because of ample LNG supply and tepid demand growth with milder weather earlier in the heating season.
While the lower LNG prices create some demand in India, for example, overall demand in Asia this winter is certainly not growing at the record-breaking pace of the past three years. The reason—supply is more than enough, as new volumes continue to come out of the U.S., Australia, and to an extent, Russia.
Last month, a Singaporean buyer of a U.S. cargo of LNG canceled the loading, as both Asia and Europe are facing an LNG glut. Some other customers of U.S. LNG cargoes are also reportedly considering paying for those cargoes but not loading them, traders have told Reuters.
By Tsvetana Paraskova for Oilprice.com
Low prices to whet #Pakistan #LNG appetite; #infrastructure poses challenges. Since Pakistan first started importing in 2015 -- imports rose to 8.4 million mt in 2019 from 6.8 million mt in 2018. #energy S&P Global Platts https://spglobal.com/platts/en/market-insights/latest-news/natural-gas/011620-low-prices-to-whet-pakistans-lng-appetite-infrastructure-poses-challenges
https://twitter.com/haqsmusings/status/1224492778370945024?s=20
Platts Analytics expects modest growth in inflows in 2020
JKM has fallen more than 40% since the beginning of 2019
No new regasification capacity to be commissioned this year
Pakistan may take advantage of low spot prices and boost LNG imports in 2020 to meet the country's growing demand for fuels amid declining output at home, but infrastructure constraints mean the South Asian country will only post a modest growth in inflows, analysts told S&P Global Platts.
With Pakistan turning out to be one of the fastest growing LNG markets since it first started importing in 2015 -- imports rose to 8.4 million mt in 2019 from 6.8 million mt in 2018 -- there was an urgent need to speed up import capacity expansions, which have been planned in order to absorb incremental inflows, they added.
"Pakistan represents a market that could take advantage of the low spot price environment and import more LNG to feed its growing natural gas demand. However, imports are close to capacity and have limited ability to grow significantly," said Jeff Moore, manager, Asian LNG Analytics, at Platts Analytics.
He added that Platts Analytics expects only a modest growth in imports in 2020 from 2019 levels.
"The underlying driver for LNG consumption growth in Pakistan has been a declining base of domestic production along with new import infrastructure, as the country has brought in two FSRUs, both at Port Qasim," Moore said.
The benchmark for spot Asian LNG prices, JKM, has fallen more than 40% from the beginning of 2019 to about $5.20/MMBtu by the end of the year due to a wave of new supply from Australia and the US, and slowing demand growth in China.
Meanwhile, the DES West India assessment, which is a relatively better reflection of prices in the Indian subcontinent, was lower by more than 41% from the beginning of last year at $4.80/MMBtu toward the end of 2019.
The spot Brent slope, which is obtained by dividing the Brent crude oil price by the spot LNG price, also declined last year, prompting Pakistan LNG Ltd. to issue fresh tenders to seek cargoes at lower Brent slope prices. The average spot Brent slope also dropped, to 8.70% in 2019 from 13.70% in 2018, Platts data showed.
"Although Pakistan represents an important market with an appetite to increase imports given the expectation for low JKM prices this year, the scope to grow imports sharply is limited in 2020," Moore said.
New wave of capacity expansion
Platts Analytics forecasts LNG imports to pick up to 12.4 million mt in 2021 if Pakistan can bring in another floating storage and regasification unit relatively quickly, and imports are expected to exceed 17 million mt by 2025. This will help underpin growing gas demand as well as offset declining production.
Pakistan is now moving toward the next phase of LNG import capacity expansion with government approvals for five new terminals, while also taking steps to further liberalize its natural gas sector through third-party access to distribution infrastructure.
According to government officials, the private sector has recently been allowed to set up five more LNG terminals, in addition to the two FSRU-based import facilities in operation.
"The broad trend is that Pakistan's gas demand in the next couple of years will be driven by the power sector," said James Waddell, senior global gas analyst at Energy Aspects.
#Pakistan, #Russia agree to raise #Islamabad’s share in equity of NSGP to 76%. Planned 1,100 Km North-South Gas #Pipeline from #Karachi will transport 1.6 billion cubic feet of re-gasified #LNG per day with a diameter of either 52 inches or 56 inches. https://nation.com.pk/19-Nov-2020/pakistan-russia-agree-to-increase-islamabad-s-share-in-equity-of-nsgp-to-76pc
Earlier, it was planned that the entire project will be executed with Russian funding, but after Supreme Court decision on the GIDC, the government of Pakistan has decided to provide maximum funding to the project. Now it has been decided that Pakistan’s share in the equity will increase to 76 percent while the Russian share will be 24 percent, said the source. Similarly, initially it was proposed that the pipeline of 1,100 kilometres was to be laid with a diameter of 42 inches with capacity to transport 1.2 billion cubic feet RLNG per day, however now Pakistan wants to increase of the pipeline to 1.6 bcfd with a diameter of either 52 inches or 56 inches.
The Russian delegation comprised of representatives from Ministry of Energy of Russian Federation, Embassy of Russian Federation in Pakistan and other Russian companies and corporations. The Pakistani side included representation from Ministry of Energy (Petroleum Division) of Pakistan, Ministry of Foreign Affairs, and Law and Justice Division and Inter State Gas Systems (Private) Limited. The talks were also attended by Minister for Energy and Special Assistant to Prime Minister on Petroleum.
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Pakistan and Russia have agreed to increase Islamabad’s share in the equity of North South Gas Pipeline (NSGP) (renamed to Pakistan Stream Gas Pipeline) to 76 percent while Moscow will fund 24 percent.
Similarly, it has also been agreed to rename the project from North South Gas Pipeline Project to Pakistan Stream Gas Pipeline (PSGP) Project.
The final approval to the proposed amendments in the inter-governmental agreement (IGA) on North South Gas Pipeline (NSGP) will be given in the 8th session of Pakistan-Russia JCC on NSGP project in December, official source told The Nation.
The Ministry of Energy (Petroleum Division) of Pakistan and Ministry of Energy of the Russian Federation held first Russia-Pakistan Technical Committee meeting from 16th to 18th November 2020 here on mutual cooperation for the development of North South Gas Pipeline Project.
Both sides agreed to sign a protocol for amendment in the Inter-Governmental Agreement (IGA) earlier signed in 2015 between both the governments to reflect the revised implementation structure of the project after requisite approvals from respective governments. The parties agreed in principle to implement the project through a special purpose company to be incorporated in Pakistan by Pakistan and Russian parties, wherein Pakistan will have the majority shareholding.
#Pakistan to Start Building 1,100 Km #LNG Pipeline with #Russia in July. Pakistan has become one of the top LNG markets in recent years. It’s running 2 terminals at capacity to meet winter demand, with 12 cargoes secured for December and 11 for January https://www.bloomberg.com/news/articles/2020-12-16/pakistan-to-start-building-lng-pipeline-with-russia-in-july
Pakistan will start building a 1,100 kilometer (684 miles) pipeline in July with Russia that will allow the South Asian nation to operate more liquefied natural gas terminals.
The South Asian nation will have a majority share of 51% to 74% in the project, while Russia will own the remainder, Nadeem Babar, petroleum adviser to the prime minister, said in an interview on Dec. 14. Pakistan’s gas distribution companies Sui Southern Gas Co. and Sui Northern Gas Pipelines Ltd., which have started acquiring land for the pipeline, will be a part of the project, while a Russian consortium will lead construction.
Pakistan has become one of the top emerging markets for the super-chilled fuel in recent years as domestic gas production has plateaued, forcing the nation to import cargoes. The nation has also auctioned a record 20 oil and gas blocks to encourage exploration activity, with bids expected by mid-January, said Babar.
Pakistan, which imported its first cargo five years ago, currently has two LNG terminals. It’s running the two terminals at capacity to meet peak winter demand, with 12 cargoes secured for December and 11 for January, Babar said. Two more LNG terminals, Energas and Mitsubishi’s Tabeer Energy, are expected to start in the next few years.
Pakistan has LNG deals for 700 million cubic feet a day and Prime Minister Imran Khan’s government will decide if the nation needs another medium-term LNG contract for five years after reviewing demand from power generators, the biggest consumers of the fuel, in the next three months, said Babar.
The nation has also decided that it will only import cleaner Euro-5 diesel from January after doing the same for gasoline earlier this year. Besides imports, Pakistan also plans to add 150 million cubic feet a day of domestic gas output this month, including 50 mmcfd from the Mari gas field, Babar said.
#Pakistan considers canceling #LNG contracts with ENI & Gunvor. Both contracts are priced at 11.62% of Brent -- or about $7.42 per million Btu, more than double the current spot price. https://www.worldoil.com/news/2020/2/26/pakistan-lng-considers-canceling-contracts-with-eni-gunvor
SINGAPORE (Bloomberg) --Pakistan’s main buyer of liquefied natural gas is considering canceling two long-term contracts as a slump in spot prices and abundant production create opportunities for cheaper supply, according to people familiar with the situation.
State-owned Pakistan LNG Ltd. is weighing the possibility of exercising termination clauses in contracts it signed with Eni SpA and Gunvor Group Ltd. in 2017, according to the people, who asked not to be identified because the matter is private. No final decision has been made and the company is seeking input from the Ministry of Energy, said the people. Canceling both deals may cost the Pakistani firm nearly $300 million in penalties, according to Bloomberg calculations.
Pakistan LNG directed questions to the energy ministry, which didn’t respond to requests for comment. Gunvor declined to comment, while Eni didn’t respond to requests for comment.
A glut of new LNG supply and sputtering demand growth have sent spot prices to record lows, straining more expensive long-term supply deals based on oil prices. The global oversupply may persist over the next few years, analysts including Morgan Stanley forecast, stoking speculation that buyers will be pressuring sellers for revisions to term contracts.
Pakistan isn’t alone in seeking better deals. Japan’s Osaka Gas entered into arbitration last year with the marketing unit of Exxon Mobil Corp.’s PNG LNG project after a dispute during a price review. Indian gas importers have started discussions with Qatar on moving away from linking LNG prices to oil and are seeking cheaper rates. In 2015, Petronet LNG reworked the pricing formula in its 25-year contract with Qatar’s RasGas that resulted in lower prices.
Pakistan LNG is still open to sourcing supplies through new or revised contracts if the pricing terms are more favorable, according to one of the people. The South Asian nation is seen as one of the biggest growth markets for the fuel, with BloombergNEF forecasting imports could grow 80% from last year’s level to 2023.
Under the terms of the contracts, which are posted on Pakistan LNG’s website, the company must give a 90-day termination notice and pay damages equal to the value of six cargoes, which is based on average Brent prices for the three months preceding the month the notice is served. That would be about $142.5 million for the Gunvor deal and $148.8 million for Eni, according to Bloomberg calculations based on front-month Brent futures traded on ICE Futures Europe.
The two deals are linked to oil at a rate that prices cargoes more than double what’s currently available through the spot market. The Gunvor contract, which runs for five years to June 2022, is priced at 11.62% of Brent -- or about $7.42 per million Btu according to Bloomberg calculations using the average of November to January.
The Eni contract, which runs for 15 years to 2032, is priced at 11.6247% for the first two years, 11.95% for the following two years, then 12.14% for the remaining 11 years, according to one of the people. Both deals are for one cargo per month.
The Japan/Korea Marker, the spot Asian LNG benchmark published by S&P Global Platts, has dropped more than 50% in the past year and reached a record low this month of $2.71 per million British thermal units. Front-month futures traded at $2.90 per per million Btu on Tuesday in New York. A spot cargo to neighboring India was purchased recently for as low as $2.40 per million Btu.
Slow roll-out of #Pakistan’s 1,100 km #LNG pipeline in the midst of demand surge. #Singapore's LNG Easy to invest $200 million in fuel network with #trucks/#rails in #Pakistan. Supplies will go to off-grid industries such as #textile mills. #gas #energy https://www.bloomberg.com/news/articles/2021-03-01/pakistan-to-begin-shipping-lng-by-truck-rail-on-pipeline-delays
While Pakistan’s dependence on overseas shipments of the fuel have ballooned since imports began in 2015, insufficient infrastructure has made it difficult to deliver the fuel to more remote parts of the country. The government and Russia are planning a domestic pipeline that connects Pakistan’s southern LNG terminals to the energy-hungry north, but the project has been delayed several years and won’t begin construction until later this year.
Door-to-door deliveries of LNG via trucks has increasingly allowed importers to leapfrog infrastructure bottlenecks and has helped boost demand for the fuel globally. The network could help places like the land-locked Punjab prefecture, where major industries such as fertilizer, textile, cement, face gas shortages.
LNG Easy, which operates in Myanmar, Singapore and Malaysia, will begin transporting LNG from Pakistan’s ports from August. PetroChina Co. will be the main LNG supplier, although the company has also signed purchase agreements with Trafigura and Malaysia’s Petroliam Nasional Berhad and is in talks with QatarGas to buy LNG fixed to the price of crude oil, said Hamid.
The company sees additional growth opportunities across South and Southeast Asia, in countries including Bangladesh, Vietnam and the Philippines, according to its website.
Global #energy prices surging! #Pakistan & #Bangladesh are among developing nations in #Asia that can no longer afford to pay soaring #LNG prices, raising the risk of power rationing or the burning of dirtier alternatives this winter. #gas #inflation https://www.bloomberg.com/news/articles/2021-09-01/developing-asia-faces-power-curbs-more-pollution-on-gas-rally
Bangladesh’s state-run Petrobangla plans to stop buying spot LNG cargoes for the rest of the year after a quadrupling of prices over the past year to a seasonal high. Pakistan has repeatedly canceled and reissued LNG purchase tenders in an effort to get better offer prices, without avail.
The evolution marks a stark turnaround after developing Asia helped drive a surge in trading of the super-chilled fuel and built LNG import strategies on the premise that spot shipments would be abundant and cheap. Unlike richer counterparts in the region that can pass on this year’s historic price rally to end-users, some governments may need to rethink LNG procurement strategies and reduce exposure to the volatile spot market, switch to dirtier fuels such as coal or oil or even curb electricity production.
“With spot prices so high and with relatively low development, these countries may not be able to afford the current sky-high prices for gas on the global market,” said Ron Smith, senior oil and gas analyst at BCS Global Markets. A return of power rationing this winter “seems quite possible” for Bangladesh and Pakistan.
Nations in South Asia have the most potential to take advantage of cheaper fuel oil to offset the rise in spot LNG prices through this winter, said Felix Booth, head of LNG at energy-intelligence company Vortexa.
#Pakistan #LNG gets single bid from #Qatar #Energy at $39.80/mmbtu for July cargo, highest ever. Pakistan has increased reliance on LNG for #electricity generation, but is facing widespread power outages as sup-ply of LNG remains unreliable & #expensive.
https://finance.yahoo.com/news/1-pakistan-lng-gets-single-155843872.html?soc_src=social-sh&soc_trk=tw&tsrc=twtr
ISLAMABAD, June 23 (Reuters) - Pakistan LNG Ltd (PLL) received a single bid from Qatar Energy at $39.80/mmbtu for an LNG import tender seeking a cargo in the July 30-31 window, an industry source said on Thursday.
The source said no bids were received for three other deliveries sought in July, which was later confirmed by documents uploaded on PLL's website.
The source added that PLL had decided not to pick up the costly bid.
A spokesman for Pakistan's power ministry, under which PLL operates, did not immediately respond to a Reuters request for comment.
Pakistan had sought four cargoes from international suppliers during the windows of July 3-4, 8-9, 25-26 and 30-31.
Pakistan unsuccessfully tapped the spot market earlier this month for an extra July cargo, with two tenders not returning valid bids.
In recent years Pakistan has increased reliance on LNG for electricity generation, but is facing widespread power outages as procurement of the chilled fuel remains unreliable and expensive.
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