Serious gas crisis can engulf the country: PEW

Sale of LNG-based power plants may pose a challenge

The Pakistan Economy Watch (PEW) on Sunday said the crisis-like situation can emerge in the gas sector during winter which will be more serious than the last year’s crisis.

A crisis can engulf the country in the biting winter as the production of local gas continues to fall, the LNG sector is riddled with inefficiency while both the gas utilities are not prepared to face the challenge, it said.

The consumption of LNG which is five-time costly than the local gas continues to increase as the government has not materialized import of cheap gas from Iran or Turkmenistan, said Dr. Murtaza Mughal, President PEW.

He said that last year domestic consumers were burdened with Rs 29 billion by the gas companies and this year the burden has been estimated to be Rs55 billion due to the shortage of buyers of costly imported gas.

Murtaza Mughal said that there is a lot of focus on constructing terminals but there is a lack of buyers in the market for which domestic consumers are made to pay.

He noted that gas was a little over 50 percent of the national energy mix which has now receded to 35 percent while the share of LNG has increased from zero percent in 2914 to 5.6 percent in 2017 and it will be almost fifty percent in a few years.

The government is set to sell two LNG-based power plants in Punjab at the cost of $3 billion as per the agreement with the IMF. Caution is required in the deal to sell 2640 megawatt power plants, big consumers of LNG, as a little mistake in the deal can leave all the companies dealing in the LNG supply chain bankrupt, he warned.

In: UncategorizedAuthor: pakistaneconomywatch