Shell and Exxon are among the companies picked by the Pakistani government to build five LNG import terminals as part of efforts to boost natural gas imports to deal with shortages in supply.
Reuters reports that the terminals
could be operational in two to three years, quoting the country’s oil and power
minister, Omar Ayub Khan.
With a fast-rising
population, Pakistan has been plagued with power outages largely resulting from
a shortage of fuel necessary to keep its power stations going. Though there is
some local production, in financial year 2017/18, demand exceeded this supply
by about 3 billion cu ft daily. Imports of gas and LNG are already on the rise
but not fast enough to ensure no more blackouts.
To remedy matters, the
government has picked five consortia to build additional terminals. The
consortia include, besides the two supermajors, also Mitsubishi Corp, Energas,
Trafigura, and Gunvor.
The consortia must submit
their detailed plans for the terminals for government approval by November 5
although Reuters quoted PM Khan as saying this approval had already been
granted.
Pakistan currently has LNG import capacity of 1.2 billion cu ft
per day in two terminals, with plans to add another with a capacity of 600
billion cu ft daily in 2020. One billion cu ft of natural gas equals about 21,000 tons of
LNG.
Besides imports, however, Pakistan is also pursuing higher local
production. The country is eager to open up its gas deposits to foreign energy
companies, and earlier this year a senior government official told Reuters, “I expect in
the second half of this year we will be auctioning at least 10, if not 20
blocks for exploration.”
The resources seem to be
there, according to estimates. Pakistan has conventional gas reserves of 20
trillion cu ft and shale gas reserves exceed 100 trillion cu ft. So far, the
authorities have delineated more than 30 gas blocks, all onshore.