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KARACHI: A Saudi Aramco delegation arrived in Islamabad on Thursday to discuss plans by the world’s largest producer of crude oil to sell liquefied natural gas (LNG), Nadeem Baber, Chairman of Prime Minister’s task force on energy reforms, told Arab News.
“The delegation is here and they are discussing with the government officials. Aramco intends to start LNG trading. They are interested in supply of short term cargoes,” said Baber.
Earlier, Mahmood Moulvi, adviser at the maritime affairs ministry, said on Wednesday that Saudi Aramco had expressed interest in selling LNG to Pakistan and also expressed interest in setting up a state-of-the-art LNG terminal, most likely in collaboration with Exxon Mobil.
“The process of awarding tender for the LNG terminal will be initiated within a month,” Moulvi said.
Aramco currently does not produce any LNG, but in January it hired an employee from Singapore’s Pavilion Energy Pte Ltd. to develop its LNG business. Its sale to Pakistan, if it materializes, will be the first LNG sale for the world’s largest producer of crude oil.
Sher Afgan Khan, a spokesman for the ministry of energy, had also confirmed that Aramco was interested in a refinery as well as LNG imports.
LNG is the fastest-growing hydrocarbon with a growth rate of 4 percent per annum. Global LNG demand is expected to exceed 500 million tons per annum by 2035, up from nearly 300 million tons per annum in 2017.
Pakistan also intends exploring its nearly 100 trillion cubic feet of untouched shale gas reserves for which a policy in on the anvil. “Our target is to finalize the policy in the next five to six months and invite tenders for exploration. Saudi delegation had previously expressed interest in shale gas exploration,” Baber informed, adding that the incentives would be decided once the policy was finalized.
Pakistan’s domestic gas output has plateaued in the last five years, falling to 1.46 trillion cubic feet in 2017-18, from 1.51 trillion cubic feet in 2012-2013, according to an annual report from the Petroleum Ministry.
This has led to severe gas shortages as Pakistan’s population, now at 208 million people, has risen sharply over the same period, driving fuel demand from industries and new power plants higher.
Gas demand was estimated at 6.9 billion cubic feet per day for 2017-18, according to Pakistan’s Oil & Gas Regulatory Authority (OGRA) --nearly 3 billion cubic feet more than daily output.
Pakistan expects to hit huge oil and gas reserves from the offshore drilling which, if materialized, would be enough for 30 years. However, results from the drilling site are yet awaited.
“Something definite can only be said once the results come in. Drilling continues as of now and I think that within eight to 10 days, the data analysis will also begin. The process was delayed due to security reasons but the situation is normal now,” said the head of PM’s task force on energy.
He added that the first indications are expected to start flowing in within the next two weeks. However, it is difficult to say anything until the reports based on data analysis came in from ENI and Exxon Mobil. “But they are hopeful,” said Baber.