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Global Energy, Engro and Pak Gasport allowed to import LNG – Alfalah Securities Limited

Karachi: The government has allocated a capacity of 500 mmcfd to Global Energy, Engro Corporation and Pak Gasport for the import of Liquefied Natural Gas (LNG) which would start from October, 2012.

According to Alfalah Securities, the three companies having a license to import LNG, would be required to deposit a performance guarantee of worth USD 10 mn in order to meet their LNG delivery requirements. Moreover, Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipelines (SNGP) would be required to spend PkR 1.2 bn in building infrastructure for transmitting the imported LNG to these companies upon submission of a timeline. The construction licenses issued to Global Energy, Engro Corporation and Pak Gasport was done on a fast track basis by OGRA to set up LNG terminals on account of offsetting the prevailing gas shortage in the country which is anticipated to touch 1.9bcfd in upcoming winter. Import of LNG would primarily be used for power generation owing to its high import cost moreover; a capacity of 500mmcfd would be capable of producing 2,500MW electricity. Pakistan is currently facing a shortfall of 1.5 to 2 bcfd gas which is expected to worsen further in the upcoming time to come however, Alfalah Securities expects LNG imports would overcome the prevailing gas shortfall in the country while its high import cost would put additional inflationary pressures on the economy.

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