Amid legal and operational hiccups, the Pakistan State Oil (PSO) officially conceded on Tuesday its inability to ensure smooth supply of 300 million cubic feet of liquefied natural gas (LNG) until October, raising fears of a continued gas shortage in winter. It also informed the federal government in writing that the cost of LNG supplies offered by some private parties would be higher than that of high sulphur furnace oil (HSFO) and low sulphur furnace oil (LSFO).As a consequence, the basic premise for LNG import – fuel cost savings – had been lost, an executive of the state-run PSO told Dawn news. He said the LNG import was basically considered as a replacement of furnace for being 20-25 per cent cheaper. This comes at a time when a team of the Qatar Gas management, which visited Islamabad on Monday, declined to enter into a long-term agreement with the PSO because of at least five major shortcomings on part of the government. The PSO said Qatar Gas had also turned down its request to extend validity of offer for LNG supply from four ships a month to two and further reduction in price by 20 cents per MMBTU. The whole project was inaugurated with much fanfare by the PML-N government and presented as proof of its business credentials, but almost six months after entering commercial operations, the terminal today presents itself more as a monument testifying to the opposite. It is far too late in the day for blame games or for higher-ups to be clarifying their positions in public. What is needed is rapid movement towards viable imports of the vital fuel. As oil prices decline further in international markets, new challenges on the price front are materialising rapidly, and there is little doubt that the price differential between imported LNG and heavily subsidised domestic gas will pose hurdles. But this ought to have been straightened out by now, considering the ministry had more than a year in which to work out all these issues. We can only hope it is not too late and that LNG imports can begin soon so the terminal will not be just a silent spectator when the winter gas allocation plans are drawn up.
pk.shafaqna.com
