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HomeCommoditiesPakistan's first LNG terminal inaugurated in Karachi

Pakistan’s first LNG terminal inaugurated in Karachi

Prime Minister Shahid Khaqan Abbasi Sunday inaugurated the first ever LNG terminal of the country here to help bring down the cost of power production and bridge the prevailing gas deficit.

Established by Engro Pakistan, the plant has been completed in a record 330 days and succeeded to transfer 100 LNG ships at the terminal since operation. Pakistan has so far saved approximately US$ 1.7 billion by importing liquefied natural gas (LNG) that was cheaper than furnace oil and diesel – major fuel sources used to run Pakistan's power plants.

LNG is also the cleanest burning hydrocarbon and the greenest fossil fuel. Compared to furnace oil, LNG is more efficient in power generation and has much lower operational costs thus contributing most to lower energy prices to end customer.

Pakistan has a gas deficit of approximately over 2.5 billion cubic feet and current LNG import is reducing this deficit by 20 to 25 percent. Internationally, over 240 MTPA of LNG is traded worldwide, out of which more than 170 MTPA is tied to take or Pay Contracts worldwide. Even coal dominated economies like South Africa have made the gas decision and are now developing framework to ensure imports of LNG.

Pakistan has imported historic 6.1 million tons of LNG through country's first LNG terminal at Port Qasim. Engro's LNG terminal has so far handled 100 LNG cargo ships at its LNG terminal and re-gasified approximately 300 billion cubic feet of gas into the gas distribution network of the country within 26 months.

Commissioned on March 28, 2015, Engro's LNG terminal at Port Qasim has the capacity to re-gasify 600 mmscfd gases. The terminal was developed by Engro and delivered after the Government of Pakistan issued a transparent and competitive bidding process evaluated by independent consultants and industry experts from the United Kingdom.

Ever since the induction of LNG into country's gas distribution network, the government has brought 2,200 MW of power generation online by switching it from expensive liquid fuels.

This infrastructure breakthrough has enabled the government to address the energy crisis through investment in new gas fired power plants for additional 3,600 MW power generation capacities. These power plants are under construction at Sheikhupura, Jhang and Kasur districts and will be Pakistan's most efficient power generation units.

Additionally the government was making capacity Take or Pay payments to five Independent Power Producers despite them operating at zero to just 50 percent of capacity.

The supply of gas enables these units to raise their production in an economical manner as the gas to diesel arbitrage brought per unit production costs down.

Posted on: 2017-08-28T11:30:00+05:00
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