By SKM
January 24, 2025
ISLAMABAD: In a new development, the state-owned Sui Northern Gas Company Limited (SNGPL) after failing to sell the RLNG, has asked the federal government to divert to international market 11-term LNG cargoes to be imported in 11 months of 2025 from ENI — the Italian LNG trading company as Power Division has refused to increase the use of RLNG for power generation even during June, July and August—the peak summer season.
The Power Division says the electricity demand is going down and it would not run the RLNG-based power plants at the optimum level for power generation because these plants rank at the last of the Economic Merit Order (ECO) list. The electricity generation cost of RLNG power plants is at the higher side which stands at Rs26-27 per unit.
The refusal of the power division has put the top mandarins of the petroleum division on the tightrope who are already trying to convince Qatar to defer 5 more LNG cargoes to 2026. Qatar has already deferred the 5 LNG cargoes to 2026 which were to arrive in 2025 under the flexible clause of the 15 year contract.
Pakistan LNG Limited (PLL) and ENI in 2017 signed the 15-year contract under which ENI is bound to provide a LNG cargo per month at 12.14 per cent of Brent. In the first and second year, ENI was supposed to provide LNG at 11.6247 per cent of Brent.
Sui Northern wrote a letter on January 21, 2025 to Managing Director of 100 percent state-owned Pakistan LNG Limited (PLL) mentioned that matter of surplus RLNG was taken up with the Power Division through a letter dated January 20, 2025 wherein Power Division was requested to review demand of RLNG for the upwards revision during June, July and August 2025 considering the excess RLNG available in these months. The letter says, NPCC (National Power Control Cell) responded on January 21, 2025 saying that the demand of the power sector for months of June, July and August shall remain unchanged in view of the declining electricity demand. So the Sui Northern has requested PLL MD to take up the matter with ENI for the diversion of LNG cargoes for the remaining 11 months of 2025 during which surplus RLNG volumes are anticipated.
The gas consumption has gone down by 150mmcf per month. It is because of that 18 LNG cargoes have become operational. The captive power plants are also going to be disconnected by January 31. They will be connected to the grid electricity under the structural benchmark of IMF loan programme of $7 billion. This will increase the number of additional LNG cargoes up to 30.
The PLL-KE LNG supply deal will end by 2025, and if not extended, the number of additional RLNG cargoes will go up by six to 36. The gas consumption has tremendously reduced mainly because of lower GDP growth and high gas tariffs.
Every year, Pakistan imports 120 LNG cargoes. It imports 10 cargoes every month — 9 from Qatar a month and one from ENI.
Because of reduced gas consumption, the line pack pressure in the main gas pipeline is still above 5.1 billion cubic feet (bcf), putting the national gas network system in jeopardy. 5bcf is the danger mark, and when exceeded, the pipeline can burst any time.
As per latest data, gas demand of the domestic sector has increased to 950mmcfd, and RLNG of 450mmcfd is being diverted to residential consumers. But, the power sector is not consuming the RLNG intake against its demand of 400mmcfd.
Data shows the domestic sector is now the biggest consumer of RLNG, and its diversion will cost the system up to over Rs200 billion. The amount will appear in gas circular debt taking it to Rs2,900 billion from existing Rs2,700 billion.
The line pack data as of January 25, 2024 reveals SNGPL system is getting per day RLNG intake of 976mmcf and indigenous gas of 741mmcfd.
Gas consumption by Agritech remained suspended from January 20 due to Annual Turnaround of their plant for about one month.
However, there is a low gas input (171mmcfd) from MOL (CPF) due to some problems at their end. The current input rate is 179mmcfd. Ends
