ISLAMABAD: Pakistan said on Monday the diplomatic crisis in the Middle East would not affect its Liquefied Natural Gas (LNG) imports from Qatar.

Speaking at a news conference, Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi said Pakistan was currently importing 600 million cubic feet per day (mmcfd) of LNG from Qatar. “This is a commercial contract. It is binding and will not be affected” by the ongoing tension between Riyadh and Doha.

He said only a force majeure event that is beyond the control of the two parties and international sanctions, particularly on gas sales, could affect LNG imports from Qatar. “There are no such apprehensions on both counts,” he said. He said Pakistan was importing 2.7m tonnes of LNG whereas neighbouring India was importing 9m tonnes and South Korea, Japan and China were importing 60m tonnes of LNG from Qatar.

He said the imported 600mmcfd of LNG, which was being supplied to the industry, captive power plants, Independent Power Producers (IPPs) and CNG sector. He said Pakistan used to import 1m tonnes of fertiliser before the import of LNG. The country will export 0.6m tonnes of fertiliser this year due to the supply of LNG to the fertiliser industry.

He said that Pakistan was building deeper relations with many countries through oil and gas deals on a government-to-government basis after the successful model of oil imports from Kuwait. In this context, LNG import deals with different countries, including China, Turkey, Russia, Malaysia and Oman, were being negotiated. Pakistan will strike an LNG deal with potential exporters, he added.

Khaqan says gas pipeline project with Iran cannot be implemented under current circumstances

He said the government was now focusing on private investors who were interested to set up LNG terminals in Pakistan and had their own supply chain and direct sales to clients. That means the government will not have any liability in this regard. He said there would be good news in the next few days about expected terminal deals.

Responding to a question about the Iran-Pakistan (IP) gas pipeline project, Mr Abbasi said Pakistan had conveyed to Iran that it could not implement the gas pipeline project due to the involvement of dollar transactions. He said there was another issue of the snapback clause. International financial institutions will not be ready to finance this project because sanctions can be revived against Iran in the case of violation of its nuclear deal with the west.

He said Pakistan could not lay a $2bn pipeline that might remain unutilised. Secondly, even if gas is delivered through the pipeline, Pakistan cannot make foreign exchange payment. He said Iran and Pakistan were in contact on the subject.

NEW FINDS: The minister said Sindh appeared to be the richest among the provinces in oil and gas reserves. Energy companies have discovered five oil and gas reserves during the last few weeks, enabling the addition of 70mmcfd gas and 600 barrels of oil per day.

He said Oil and Gas Development Company, Pakistan Petroleum, Mari Petroleum and OMV have made five oil and gas discoveries in Sindh and 70mmcfd gas would be added to the system of Sui Southern Gas Company. He said gas discovered from new fields amounted to $150m per annum at the current gas price.

He said oil and gas companies had made 98 discoveries since the present government came to power and added 944mmcfd gas to the national system. However, he said the same volume of gas was depleted from the existing gas fields.

He also dispelled the impression that the federal government was not implementing Article 158 under the 18th Amendment. He said gas on the system of Sui Northern Gas Pipelines (SNGPL) had dropped 35 per cent from 1,665mmcfd to 1,120mmcfd since 2010 when the amendment was implemented.

However, he said that gas supply on the network of Sui Southern Gas Company had increased 3pc from 1,174mmcfd to 2,017mmcfd since 2010 despite depletion in gas reserves.

Mr Abbasi said SNGPL was still facing Rs6-8 billion gas theft in Khyber Pakhtunkhwa, but the local administration was not cooperating in tackle this issue.

He said 2m gas connection applications were pending with SNPGL when the present government came to power. He said the government had formulated a merit-based policy and those who applied first were getting connections. He said 1.5m gas connection applications were pending now with SNPGL.

He said the government had no plan to increase gas prices from July 1. He said that despite an increase in gas connections, the situation would be normal in the coming winter season.

Published in Dawn, June 13th, 2017