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No money to buy LNG despite fall in prices: Standing Committee told
Pakistan faces problems about new LNG deals due to its prevailing economic situation amid efforts to secure deal with the International Monetary Fund (IMF).
Islamabad: Liquefied Natural Gas (LNG) Managing Director informed parliament’s standing committee on Monday about falling price of spot cargo and lack of funds to secure the deal.
The MD said that the cargo spot rate fell down up to 50 per cent.
“We don’t have money to buy the LNG despite fall in the cargo spot rate,” said the MD, explaining the situation before the standing committee.
The committee, with Senator Abdul Qadir in the chair, discussed the matter of Rs445b recovery of Gas Infrastructure Development Cess (GIDC).
Secretary petroleum told committee that finance ministry had already formed a committee on this matter while Finance minister chaired the meeting of that committee.
Secretary also suggested that petroleum division was of the view that the whole gas must be used for electricity production, arguing that that if the natural gas was provided the cost of electricity production could be 70 per cent low and it was the most suitable method of producing electricity in the world.
He regretted that their view was not being heard as the industry was quite powerful to get its things done and that they were providing gas to the domestic consumers.
At this, the Standing Committee on Petroleum sought details from the Ministry of Petroleum to work on the said proposal.
During the meeting, the LNG Limited MD said that the LNG prices fell down by 50 per cent, adding that the cargo spot rate went down by 50 per cent in the market.
“The price of LNG per Metric Million British Thermal Unit (MMBTU) is $14 in the global market,” he added.
The LNG MD said the financial condition was not good to purchase the cargo gas and they were still relying on the long term agreements to meet the demands.
He also revealed that there was an issue of Import Letter of Credit at the moment.
“Nobody will come if we give the tender for LNG at this time,” said the MD, pointing out that they had already gave LNG tenders for four times but in vain.
However, he told the committee that they could give the tender for spot LNG cargo for the next three months, saying that they would need two LNG cargoes next year in January.