Islamabad: The government of Pakistan Tehreek-e-Insaf (PTI) has shelved a plan of PML-N to import Liquefied Natural Gas (LNG) from Turkey and decides to explore options of import from other countries.
An agreement was signed by the previous government of Pakistan Muslim League-Nawaz (PML-N) with Turkey to LNG import in a government-to-government arrangement without going into the bidding process following a model of Qatar.
An inter-governmental agreement between Pakistan and Turkey was signed on February 23, 2018 after obtaining approval from the cabinet. Pakistan State Oil, Pakistan LNG Terminals Limited (PLTL) and Turkish Petroleum International Company were nominated in the agreement for LNG trade.
However, the present government in a recent meeting of cabinet decided to shelve a plan of LNG import from Qatar. Earlier, the cabinet had allowed Petroleum division to sign the protocol to amend the agreement for cooperation in the field of hydrocarbons between Pakistan and Turkey and directed that the case be placed before the economic coordination committee of the cabinet for consideration.
However, the cabinet chaired by Prime Minister Imran Khan noted that the Turkish counterpart did not trade in LNG while Pakistan already had a number of agreements with countries trading in LNG. Hence, there is no need of any agreement with Turkey at this stage, the cabinet decided and observed that the intended amendment in the agreement was not feasible.
Earlier, the Cabinet members had argued that the rationale for signing the deal with Turkey should be reviewed and agreed to refer the matter to the Economic Coordination Committee (ECC) for its consideration. The cabinet was told that Pakistan LNG Limited (PLL), which had been established for LNG imports, was not mentioned among the nominated companies in the agreement.
The Law and Justice Division, while responding to a request for its views, suggested that proposed amendments could be made by the two sides by signing an amended protocol. It also said approval of the cabinet would be required for signing the protocol. The Law Division cleared the draft of amended protocol from the legal point of view. The Turkish side also agreed to the draft amendment.
At present, Pakistan has two LNG terminals having handling capacity of 1.2 billion cubic feet per day. The PLL management has been pushing the Ministry of Energy (Petroleum Division) for months to ask the Power Division to place a firm demand for LNG consumption in power plants as it was a cheaper fuel. However, power sector was not ready to sign gas supply deal on ‘take or pay’ basis.