Energy: Pakistan’s Engro to start LNG marketing business

0
90


Web Desk
Engro Corporation , a conglomerate with subsidiaries in in food , fertilizer and energy sectors, is starting a gas marketing business in Pakistan in collaboration with the New York Stock Exchange–listed Excelerate Energy, according to English newspaper,Daily Dawn.
Engro Eximp FZE, a subsidiary of Engro Corporation , will lead the joint effort to establish a re-gasified liquefied natural gas (RLNG) marketing business to open up new fuel supply avenues for private businesses.
Pakistan’s domestic gas reserves have depleted severely in the recent past. Natural gas production has also gone down at an annualised rate of 2.2 per cent for five years. The gas sector regulator, OGRA, believes that the shortfall will soon be close to two billion cubic feet per day (bcfd). The average winter demand in the South Asian country is 6.5-7bcfd.
“The government has already approved third-party access, which opens possibilities for making (existing) terminal capacity available through expansions by bringing bigger floating storage re-gasification units (FSRU) as well as the sale of booked but unused capacity,” the newspaper quoted the Chief Executive Officer of Engro Eximp FZE Kaleem Asghar .
Pakistan began importing RLNG in 2015 by installing two purpose-built terminals on Port Qasim. Pakistan State Oil Company Ltd uses Engro Elengy Terminal to import gas under long-term contracts while Pakistan LNG Ltd brings spot purchases through GasPort LNG Terminal.
“In the long run, when a new terminal — either FSRU or land-based — is developed, (it) will also make available capacities for utilisation by multiple private parties,” Kaleem Asghar added.
The upcoming LNG terminals — Qatar-backed Energas LNG and Mitsubishi-backed Tabeer LNG — will have capacities of 750-1,000mmcfd each. Given the capacities of already operational Engro Elengy (690mmcfd) and GasPort LNG (750mmcfd), the addition of the two “merchant” terminals will more than double the country’s re-gasification capacity.
But how will the new trading business get access to the pipeline capacity currently controlled by the Sui gas companies? According to Kaleem Asghar, the partners will “engage the Sui companies” to access pipeline capacity. “There’s also an option to further explore gas marketing through virtual pipelines to help develop a private gas market,” he said.
Virtual pipelines refer to the transportation of LNG from the port to industrial consumers or retail fuel stations through specialised trucks.
Contrary to the popular belief, , using virtual pipelines to transport gas isn’t prohibitively expensive. “It’s costly only if you bring LNG from other countries in small containers. But if you import the fuel in large volumes and distribute it onwards through trucks, pipeline tolling charges almost equal the freight cost,” he said, adding that countries like India, Turkey, and China are already using virtual pipelines.
New industrial units being set up in dedicated industrial parks are getting gas connections at RLNG rates. These industrial units along with CNG pumps will constitute a large part of the clientele for the new venture of Engro Corporation, the official said.

LEAVE A REPLY

Please enter your comment!
Please enter your name here