The minister said that he and Punjab Chief Minister Muhammad Shahbaz Sharif had recently visited Qatar to hold discussion with the authorities regarding LNG import. The energy minister of Qatar wanted that LNG terminal should be build first and then the two sides could move further for supply of gas.
Abbasi said that the government had decided to go for the construction of terminal first and then sign agreement, which was being followed by different countries. He said that the government would explore other options for import of LNG in case the price of gas given by the Qatar government was not feasible. He further said that the government initial requirement of LNG was 1.4 million tons and the price would be major factor in reaching an agreement.
The minister maintained that the government would invite bid for import of LNG on fast track basis through the terminal which had jetty. "I am hopeful that LNG import will start in mid October under this project," he said. About the other options, he said that Sui Southern Gas Company (SSGC) had invited bids to initiate work on retrofit project to import LNG. Under this plan, the SSGC wants to convert Progas LPG terminal into LNG handling facility.
The minister said that technical bids for import of LNG at SSGCL terminal had been opened whereas financial bids are still to be opened. "The Ministry has directed the board of directors of SSGC to evaluate financial bids for 500 MMCFD project to decide whether the project if viable or not. We will move for the project if it is technically and financially feasible," he said and revealed that 4Gas Asia had qualified for it.
He said that two projects of 500 MMCFD each were under consideration which could be built on Port Qasim or Gwadar Port offshore. The minister said that the fuel change could have saved $500 to $700 million to the government but regretted that the necessary decisions in this regard were ignored during the last ten year and consequently the country is paying the price. He said that international consultants have suggested that Asian Development Bank (ADB) should be involved in the process for import of LNG.
Abbasi said that the heads of all the companies and board of directors would be replaced for which advertisements had been released in the media to hire competent people through a commission. He observed that board of directors was either working for personal gains or involved in corruption. He added that the price for captive power plants would go up to make it competitive and the people would have to also pay the actual price of gas which would increase considerably after the LNG mix. Abbasi said that the power sector was being given top priority in terms of gas provision and being provided full supply except shortfall of 50 to 60 MMCFD. As a result, he said that the power generation increased to 16000 MW.
About Iran-Pakistan gas pipeline, he said negotiation would be started with Iranian government as soon as its cabinet was formed. He said that there were US sanctions on Iran as well as financing problems. The minister said that the Iran government had committed $500 million financing to lay the pipeline on Pakistani side. He said that Iran was facing sanctions and Foreign Office had been tasked to work out the impact of US sanctions on this project. In reply to a question, he said that physical work on the project had not started yet.
It may be stated that the modalities for import of LNG were also finalised by a committee of the Economic Co-ordination Committee of the Cabinet (ECC) during the tenure of former Finance Minister Dr Abdul Hafeez Sheikh. These modalities finalised by Dr Hafeez for import of LNG include; (i) long term LNG import under integrated project structure for 400 MMCFD and RLNG delivery at SSGC receiving point through open competitive bidding following PPRA Rules and level playing field to all the parties may it be new entrants or to whom construction licenses have been issued etc.