‘LNG utilisation crucial for power sector’

KARACHI: The demand of liquefied natural gas (LNG) is increasing continuously in the power sector to meet the energy requirement, whereas the utilisation of the terminal would be exceeding to more than 100% by the end of this year.

This was claimed by Elengy Terminal Pakistan Limited (ETPL) at Port Qasim Chief Executive Officer Syed Mohammad Ali during an interaction with media.

“LNG is not only a replaceable, alternative and affordable fuel for the power companies but it is also the best suitable source for the domestic sector with significant price edge over liquefied petroleum gas (LPG), mainly in the northern part of the country,” he said.

The tariff of diesel-run power plant is estimated to settle at 20 cent per unit as compared with 11 cents calculated in the plants run by LNG, he added.

He said the capacity of the power sector could be best utilised in the power producing companies through LNG, which is not only efficient than diesel but also reduces the expense under operation and maintenance.

He said the government has identified few of the power plants that agreed to utilise and adopt this source of energy in future. There would be a tough competition or even quarrel among the independent power producers (IPPs) for getting their share in LNG in the future, he added.

He said, “Pakistan has power generation capacity of up to 820 megawatts (MW), which operates on diesel or natural gas. In case of shortage of gas, these power plants become inoperative and are shifted on high-speed diesel (HSD). In 2014-2015, 2.8 million tonnes of HSD was imported. On any given day, HSD is also more expensive than LNG, as it remains a cheaper option from a cost-to-economy perspective. LNG, when compared with high-speed furnace oil (HSFO), is more efficient in power generation, leading to lower operational, management and transportation costs.”

The ETPL chief said according to estimates, Pakistan is expected to save as much as $1 billion to $ 1.5 billion per year by importing 1 billion cubic feet (bcf) of LNG and replacing LPG, HSD and HSFO. He spoke of the LNG terminal constructed by Engro Limited and defended the LNG terminal tariff.

Ali said the success of the ETPL project would benchmark all the future projects in the country in terms of high quality, standards, service and competitiveness offer. Natural gas production in the country per day is approximately 4 bcf against the accumulated demand of more than 6 bcf and the solution lies in LNG, he added.

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