KARACHI: ExxonMobil has inked a gas supply deal with Pakistani energy company Universal Gas Distribution Company (UGDC), according to which commercial import of LNG by private sector would commence for the first time.
“The first shipment of LNG is expected by the next month which will change the entire gas landscape in Pakistan,” CEO of UGDC said in a statement.
The agreement was signed in Houston between UGDC, the first company to get private gas marketing license in Pakistan and ExxonMobil.
Special Assistant to Prime Minister on Petroleum Nadeem Babar, Chairman LNG Market Development Alex Volkov, President Market Development ExxonMobil Irtiza Sayyed, Country Manager Pakistan ExxonMobil Shahrukh Mirza were also present on the occasion.
Speaking at the event, Nadeem Babar said that this was a historic day as ExxonMobil decided to invest in Pakistan after a gap of twenty years. He said that businessmen would be provided enabling environment according to the vision of Prime Minister Imran Khan.
“The deal is an honour for Pakistan and we will promote ease of doing business to promote investment in all the sectors including the energy sector”.
Advisor said that the government was getting out of the gas import business and this deal was the first step in that direction. “Investment by ExxonMobil will also propel other energy companies to invest in Pakistan which will bring down the price of gas to help masses and the environment”.
“Exxonmobil decided to invest in Pakistan after two decades with a vision to provide economical and environmentally friendly gas to consumers on regular basis. We will support UGDC so that it can overcome the shortage of gas in Pakistan,” Irtiza Sayyed said.
Ghiyas Paracha said that the government changed third party rules to allow the private sector to import gas. “Now we will be able to buy surplus gas from terminals and also buy the fuel from five upcoming terminals which will revive the CNG sector”.
He said that the development would increase parity between the price of CNG and petrol, fares would be reduced, one billion dollars of foreign exchange per annum would be saved, two million vehicles would be converted to CNG and foreign investment would be attracted for import of CNG kits and cylinders.
Pakistan’s Liquefied natural gas (LNG) imports in fiscal year FY19 ended June 30, 2019, stood at $3.33 billion, up 35.96 percent as compared with LNG imports of 2.45 billion in the corresponding period previous year.
The natural gas is a major contributing fuel in the country’s energy mix. Its share in the primary energy mix is around 48 percent.
There is a significant rise in demand and consumption of gas by residential and domestic consumers owing to price differential vis-a-vis other competing fuels. The Oil and Gas Regulatory Authority (Ogra) estimates the gas shortfall to increase to 6.6bcfd by FY2028.