Petroleum Division asks Power Division for firm RLNG purchase plan at Rs2,000 per MMBTU

The Petroleum Division has asked the Power Division to provide a firm plan for lifting Regasified Liquefied Natural Gas (RLNG) at Rs2,000 per MMBTU, as part of efforts to reduce the government’s take-or-pay liabilities under LNG supply contracts, Business Recorder reported. 

The request follows concerns that domestic gas fields are being shut down to accommodate surplus, high-cost RLNG in other sectors, including residential use. Power plants have not been able to fully utilise their RLNG allocations due to low electricity demand and operational constraints under the National Power Control Center’s Economic Merit Order.

BR cited a senior Power Division official, who confirmed that both divisions are working to cut LNG-related liabilities in line with the broader strategy to reduce capacity payments owed to Independent Power Producers and government-owned power plants.

Earlier, the government diverted some LNG cargoes to the international spot market and rescheduled others with Qatar due to weak domestic demand and high prices. The SNGPL network has also come under line-pack pressure from underutilisation.

Petroleum Minister Ali Pervaiz Malik reiterated that Pakistan would not abandon its long-term LNG contract with Qatar, stressing the strategic importance of relations with Doha. 

He clarified that any discussions on pricing should not be interpreted as a move to cut contracted volumes. The minister visited Qatar in August to explore options for rescheduling LNG cargoes to ease financial pressure on Pakistan State Oil.

Differences have reportedly emerged between the Petroleum and Power Divisions over LNG utilisation, with the latter citing low demand and high costs. 

During a recent meeting of the Committee on Structural Reforms in the Petroleum Sector, chaired by Malik, Power Planning and Monitoring Company official Naveed Qaiser presented a comparative analysis of imported coal and RLNG energy purchase prices.

The analysis showed that the power sector currently consumes around 340 million cubic feet per day (mmcfd) of RLNG, a figure projected to decline to 175 mmcfd by 2031. It is estimated that RLNG consumption could increase by 174 mmcfd at Rs1,500 per MMBTU, 127 mmcfd at Rs2,000 per MMBTU, and 95 mmcfd at Rs2,209 per MMBTU.