Pakistan Says it is Importing Cheapest LNG in the World

Pakistani oil minister has claimed that the country has secured world’s cheapest imports of LNG.

Speaking during an event held in Islamabad, Shahid Khaqan Abbasi said the LNG tolling tariff of 0.66 cent per MMBTU was also the lowest of any floating terminal, which would go down further, Radio Pakistan reported on Friday. The minister added that LNG supplies were delivered in the shortest time of 11 months after five failures to do so over the past 10 years.

Furnace oil-based generation had dropped by 13 percent in April against 10 percent increase in RLNG-based power production.

Pakistan signed its first long term deal earlier this year with Qatar. As per the deal signed in February, Qatargas will supply fuel to Pakistan State Oil (PSO) from 2016-2031. The price for each LNG cargo in a particular month has been agreed at 13.37 percent of Brent where Brent value is average of the preceding three months. Qatargas will supply 3.75 million tons per annum (MTPA) of LNG to PSO. The 15-year long term deal is the largest deal of first quarter 2016, a report by GlobalData suggests. The deal has been estimated to be worth $16 billion.

First LNG shipment under the Pakistan-Qatar long term deal docked at the LNG terminal in Karachi in March. Country's first floating unit is based at Port Qasim in Karachi. 

Pakistan is facing severe shortage of gas as demand has outstripped supply in recent years. The country’s total gas production is around 4 billion cubic feet per day (bcfd), while the demand stands at 6 bcfd.