The government may not be able to purchase three additional cargoes of liquified natural gas (LNG) on the spot market due to the ongoing money crunch.
Pakistan LNG Limited (PLL) has informed the Petroleum Division that from April 2023 to September 2023, Terminal-2 has the capacity for an additional 2-3 LNG cargoes per month, while spot LNG prices are currently at $13.4 MMBTU ($43 million per cargo), reported Business Recorder.
PLL has proposed that the power sector be asked to analyze the potential savings in power generation based on imported additional LNG through the replacement of any other fuel, as the ongoing money crunch is making it extremely difficult to arrange cash for LNG purchase.
The Petroleum Division has requested that the Power Division provide feedback/comments on the PLL proposal in order to reduce generation costs in comparison to any other imported fuel.
PLL will ensure one cargo per month from March to September 2023, according to the current plan. However, the total cargoes imported by both PSO and PLL in March, May, June, and September will be nine, while ten cargoes will be imported in April, July, and August 2023.
The National Electric Power Regulatory Authority (NEPRA) has repeatedly urged the Power Division and the Petroleum Division to supply an agreed quantity of RLNG to power plants so that the cost of expensive fuels such as RFO is not passed on to consumers.
National Power Control Centre (NPCC) has repeatedly complained during public hearings at NEPRA that they are not being supplied with the required quantity of RLNG for the plants, causing them to operate expensive plants.
Meanwhile, on March 17, 2023, the Directorate General of Gas (Petroleum Division) stated in a letter to the Power Division that Sui Northern Gas Pipeline Limited (SNGPL) has expressed serious concerns that the system pack has reached saturation. SNGPL has reiterated that the situation has arisen primarily due to a lower power offtake against its stated demand of 521 MMCFD.
Pertinently, the average power consumption since March 1st is 378 MMCFD, while consumption is currently around 300 MMCFD, and consumption is expected to fall further due to weather forecasts. According to the plan, SSGC had to retain 70 MMCFD, but its average retention in March is only 11 MMCFD.
Under the current circumstances, SNGPL is forced to further reduce indigenous petrol input in order to mitigate the situation. According to the Directorate General of Gas, an immediate increase in power offtake and maximum RLNG retention by SSGC is critical. Indigenous input from local petrol fields will be normalized once power begins off-taking petrol in accordance with its stated demand.
The Power Division has been asked to advise the concerned parties to increase RLNG consumption in accordance with their demand in order to ensure the smooth operation of the gas system.