Pakistan imports 7.76% less LNG in 11 months

KARACHI: The imports of the liquefied natural gas (LNG) registered a decline of 7.76 per cent to $2.3 billion in the first 11 months of the current fiscal year, compared with the imports of $2.49 billion in the corresponding period of the last year, as slower activities due to Covid-19 pandemic eased the demand, official data suggested.

KASB Securities managing director A A H Soomro said that the industrial activity was remained limited during the most part of the current fiscal year, resulting in a reduced electricity demand, while LNG-based power plants were not fully utilised.

“[The] government is not willing to run LNG plants in the long-run, as these are getting expensive. However, in the short-run, the LNG imports would increase, as the industrial activity is picking up.”

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Soomro said that the indigenous gas reserves were depleting fast, and imported commodity was the only option to meet the country’s energy demands.

“Although the LNG prices in the international market have stabilised, there is an impediment in increased import, i.e., insufficient pipeline capacity of the RLNG [re-gasified liquefied natural gas] terminals.”

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The country’s LNG imports stood at $276.56 million in May 2021, down 6.16 per cent, compared with the imports of $294.73 million in April 2021; and up 156 per cent as against the imports of $107.98 million in May 2020.

The expensive furnace oil (FO)-based generation has declined significantly, as new LNG/coal-based power plants became fully operational, while the hydel power generation improves with the restoration of water levels in the reservoirs.

“The gas shortage had made the government unable to provide gas to different sectors of [the] economy, including power plants, CNG stations and fertiliser plants, resulting in huge production, as well as foreign exchange losses, but the import of LNG has changed the scenario,” an official said.

Pakistan will start building a 1,100km (684 miles) pipeline with Russia this year that will allow the country to operate more liquefied natural gas terminals. Pakistan will have a majority share of 51 per cent to 74 per cent in the project, while Russia will own the remainder.

Pakistan has become one of the top emerging markets for the super-chilled fuel in the recent years, as domestic gas production has plateaued, forcing imports. Pakistan, which imported its first cargo five years ago, currently has two LNG terminals running at Port Qasim.

According to the data issued by the Pakistan Bureau of Statistics (PBS), the overall petroleum group imports remained flat at $9.88 billion in the 11 months as against the imports of $9.80 billion in the same period of the last year.

Crude oil imports were recorded at $2.72 billion during the period, up 5.32 per cent, while the refined petroleum products imports declined 0.15 per cent to $4.4 billion.