The Planning Commission has advised the government to transition from the costlier liquefied petroleum gas (LPG) to the more affordable natural gas (LNG) to enhance energy sustainability. The Energy Planning and Resource Centre (EPRC) of the Commission has further suggested the establishment of a third floating LNG terminal, discontinuing gas supply to the industrial sector’s captive power plants, and utilizing old gas fields for storing imported LNG during high consumption periods.
They emphasized adjusting the gas pricing mechanism to mirror the true LNG-delivered costs. Comparing the prices, natural gas costs $5.02 per million British thermal units (mmBtu), while LNG is priced at $16.84, and LPG stands at a high $22.06. The EPRC noted that, in usual market conditions, LNG could replace LPG in domestic sectors due to its more competitive pricing.
Recommendations for Cross-border Gas Pipelines and Price Adjustments
To further its commitment to energy sustainability, immediate actions are recommended for cross-border gas pipeline projects, like the Iran-Pakistan and Turkmenistan-Afghanistan-Pakistan-India (Tapi) ventures. The Planning Commission highlighted the fluctuations in international LNG prices, pointing out that spot prices soared to $30.60 per mmBtu the previous year. It was also stated that Pakistan’s current gas pricing system isn’t financially viable, resulting in deficits, accumulation of gas debt, and pressure on public sector LNG-import firms. Addressing this, there’s a call for price revisions in line with market dynamics, including the LNG purchase price and local gas production cost.
With predictions for LNG demand, Pakistan’s current terminal capacity can handle LNG imports till 2025. Beyond that, a terminal with a capacity of at least 600 million cubic feet per day will be needed. The Planning Commission also emphasized reducing reliance on pricey LNG spot market imports by considering pipeline imports through neighbouring nations, notably the proposed Tapi and Iran-Pakistan pipelines.
