Staff Reporter
ISLAMABAD:
In the larger national interest, Special Assistant to the Prime Minister on Power & Petroleum, Tabish Gauhar has opposed the construction of North South Gas Pipeline NSGP) with Russia help and proposed to complete the project with sui companies.
Sharing his opinion through a letter which was sent to Hammad Azhar, Federal Minister of Energy, SAPM Tabish Gauhar has asked to immediately leave fire fighting and adopt important strategic workstreams to avoid energy crisis of the country.
According to sources, Asad Umar, Chairman Cabinet Committee on Energy (CCoE) has conducted a meeting yesterday to review and analyse the proposals forwarded by SAPM Tabish Gauhar.
“The government is serious to control the prevalent energy crisis of the country and the suggestions forwarded by SAPM Tabish Gauhar may be implemented to avoid the energy crisis of the country,” said sources.
SAPM Tabish Gauhar has forwarded the same letter to PM Imran Khan, Azam Khan, Secretary to PM, Shaukat Tareen, Finance Minister, Asad Umar, Chairman CCoE, Ali Raza Bhutta, Secreatry Power, Ar. Arshad Mahmood, Secretary Petroleum.
SAPM Tabish Gauhar, in his letter, asked to make substantive headway with the Russian consortium in the next couple of months on this additional Karachi to Lahore gas pipeline (NSGP) which is of critical importance to Pakistan’s energy security. He asked that this gas pipeline project should be financed by the Rs. 321 billion GIDC funds already raised from the public for this very purpose and not from third party debt & equity that will add on to the gas consumer bill. He said the people of Pakistan shouldn’t be paying twice for the same asset. By giving veto right to the Russians on design and construction, it is almost inevitable that they’d opt for the larger diameter (56 inch) pipe that our Sui companies have no track record of – whilst according to our local analysis, we can meet the projected gas demand for the next 10-15 years with a relatively smaller (42 inch) diameter pipeline at a potentially lower upfront project cost (savings of up to $500 million) and quicker timeline (2023 versus 2024 completion), said the SAPM Tabish Gauhar.
About utilizing the “Excess” LNG Terminal Capacity, SAPM Tabish Gauhar said that there could potentially be up to 300 MMCFD (3+ additional LNG cargoes per month) of “excess capacity” available at the existing two RLNG terminals (that may be utilized on a strictly private-to-private i.e. without any GOP “take or pay” payment obligation and on an open / third party access bases) to further bridge the demand-supply gap, especially in the coming winters for the domestic gas consumers, under a “without prejudice” arrangement sanctioned by OGRA.
Regarding virtual LNG pipeline, Tabish Gauhar said that at least three (3) parties have proposed supplying up to 300 MMCFD of LNG (again, on a strictly private-to-private basis) to industrial customers via cryogenic road tankers from Gwadar & KPT within the next 9-12 months. Aside from meeting industrial gas demand in and around Karachi (without the need to physically access the Sui’s pipeline network), this proposal may potentially make available the 150 MMCFD of RLNG that SSCG is currently retaining in their system and accordingly release the same to meet the deficit up north (in the SNGPL system).
SAPM Tabish Gauhar further said that to remove the price anomaly between the price of indigenous and imported gas, and the associated adverse impact on the sector’s financial sustainability, the long-awaited “political consensus” on WACOG must be reached ideally before the year end. He said that the two new “merchant” LNG terminal developers will achieve financial close and start construction this year while the country need at least one additional import terminal (without any “take or pay” commitment on the part of GOP) by 2023.
Urging from the government to show substantial progress on the On-Ground LNG Storage Infrastructure, SAPM urged to use GIDC funds (already collected) to start construction of on-ground LNG storage facilities at Port Qasim (up to 10 days storage in Phase 1). OGRA has been finalizing third party access rules and GoP (51%) can bring in the private sector (49%) later.
About new LPG Policy, SAPM said that the need is to get it through the internal approval process to enhance/accelerate supply of this alternative fuel to domestic consumers and correspondingly reduce the burden on natural gas provision via pipeline network.
SAPM also stressed to remove impediments to accelerated natural gas drilling activities in the frontier regions of Baluchistan & KPK by: (a) processing available 2D seismic data (20%), surveying the remaining basins (80%), and making the info available to all interested E&P companies.
