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DISCUSSION HELD ON SEPTEMBER 14, 2015

1. Total Requirement of Gas in Pakistan

The present gas requirement of Pakistan is 6 Bcfd (Billion cubic feet
per day).

• 50% of the country’s total energy needs are met through natural
gas.

• Natural gas supplies during 2011-12 remains at 3800 MMCFD.
The current production, 2014-15 is 4.0 Bcfd. The shortfall
remains at 2.0 Bcfd.

• The largest use of natural gas is in power sector followed by,
fertilizer, cement, industrial, transport, commercial and
domestic.

2. Available gas and shortfall

The LNG carriers. TPA rules salient features and other statutory requirements LNG Policy 2011 Under the LNG policy 2011. The base-line for the price may be taken as USD 0. Unbundled LNG Project .900 m 3 (cubic meters). At present rate of production. 3. a business concern may take up LNG business under: a.000 m3 LNG per shipment) in size. PSO has been nominated by Ministry of Petroleum & Natural Resources (MP&NR) to import LNG on behalf of SNGPL and SSGCL.e. as a larger carrier will spend more time on port subjecting it to demurrage charges. Engro Elengy Terminal Pvt. (EETPL). PSO is carrying out spot purchases of the LNG carriers available in the market (presumably @ USD 14- 16/MMBtu). Integrated LNG Project . There is no firm long-term agreement between PSO and Qatar Gas/any other LNG Seller.06/MMBtu. 5.an interested party may become either: . available in the FSRU by M/s. including 5% heel. EETPL offers to the third party.000 m3 (delivery upto 142. 4. who is interested in bringing in their own LNG. setting up an LNG (receiving. the reserves will last for 18 years. Ltd. upto March 2016) and 200 MMCFD in years 2 till 15. Presently. The Pakistan’s total recoverable gas reserves at estimated at 27 TCF (Trillion cubic feet). storage and re-gasification terminal) and carrying out Gas Sales and Purchase Agreement with GoP designated buyer.LNG Developer responsible for importing LNG. LNG Carriers coming to Pakistan arranged by PSO LNG import is constrained by the storage capacity of 150. gas utility b. The cost for re-gasification will depend on what M/s. therefore. FSRU availability and cost The existing FSRU has a spare capacity for 400 MMCFD in year 1 (i. have to be 150.

LNG Developer/LNG Buyer/LNG terminal Owner/operator responsible for implementing the applicable provisions of OGRA ordinance 2002.900 m3 out of which only 143. which is kept in the LNG storage tanks to maintain cryogenic temperature.responsible for setting up an LNG receiving. EETPL has acquired FSRU named Exquisite from M/s.335 m3 can be re-gasified. the remaining amount being heel. 6. storage and re-gasification terminal and carries out a tolling agreement with LNG Buyer. . Third Party Access Rules These rules provide framework for carrying out gas transportation agreements/access agreements (GTA/AA) between gas transporters (business entity owning gas transmission network) and Shippers (business entity which purchases its own gas and wishing to utilize transporters facilities for its transmission). LNG Buyer . FSRU provided by M/s.GoP designated entity/gas utility/any other party responsible for import of LNG. The designed gas send-out (LNG re-gasification rate) is 690 MMCFD. The shipper and transporter agree on Maximum Daily Quantity under firm/interruptible basis. Engro Elengy Terminal (Pvt. LNG supplies to be through international competitive bidding under PPRA rules by LNG Developer/Buyer.) Limited (EETPL) M/s. Excelerate Energy on time-charter basis for a period of 15 years. carries out an agreement with LNG seller LNG Terminal Owner/Operator . The pipeline capacity can be booked by Shipper(s) on either firm basis (GTA/AA term of 1 year or more) or interruptible basis (GTA/AA term of 1 day to less than a year. The storage capacity of FSRU is 150.

186 ft3 of Natural Gas The flow rate of gas pipelines and gas send-out rate of FSRU is measured in MMCFD (million cubic feet per day). volume occupied by a cubic foot of gas at 14. billion(B) or trillion(T)) is used. 1 m3 LNG = 600 m3 = 21. . million(MM).57 ft3/sec.696 psi and 60 oF. Natural gas is measured in standard cubic meters (scm. 1 m3 = 35.e. i. volume occupied by a cubic meter of gas at 101. sm3).7. Whereas in SI. when it changes phase from gas to liquid. Transmission capacity The total existing transmission capacity is 3950 MMCFD comprising 2310 MMCFD of SNGPL's transmission network and 1640 MMCFD of SSGC's transmission network.35 kilopascals and 21 oC. Natural Gas is measured in standard cubic feet (scf.e. No matter what denomination (thousand(M). a cubic foot is assumed to be a standard cubic foot. Natural gas and LNG Measuring Units In the US Customary System (USCS). Since the volume of natural gas reduces by 600 times. 8. 1 MMCFD is equal to 11. sft3).31 ft3 LNG is measured in cubic meters (m3). i.

18 units 1 million barrels oil 0.Multiply by -------------------- 1 billion cubic metres 1 35.74 35.60 NG 1 billion cubic feet NG 0.90 0.99 0. Suggested Supply Chain Model The suggested business model will be of an LNG developer having its dedicated gas transmission pipeline for RLNG transport and firm commitments with RLNG buyers/end-users.15 5.14 0.025 0.11 5.028 0. . after which SSGC will be able to transport 240 MMCFD gas to SNGPL and has a demand for 240 MMCFD for its own consumption.35 0. LNG Buyer may contract with EETPL for utilizing additional terminal capacity available in FSRU.028 1 0.82 39.41 1 equivalent (BOE) 9.12 months (May 2016 .2 1 0.025 0. 10.021 1.7 6.e. LNG developer can establish first FSRU based LNG terminal in a time frame of 8 . X 358 km pipeline by SSGC.September 2016 can go upto December 2016) to add 400 MMCFD supply in the 42" dia.500 million depending on the LNG storage capacity and gas send-out (i. This will materialize upto December 2015.3 0.11 39. Starting from now.7 7. Natural gas and LNG To convert: B m3 B ft3 MM MM T MM TOE tons Btu BOE LNG From ------------------. Re-gasified LNG produced). In the interim period i. from today till December 2016.19 1 million tonnes oil 1.e.021 1 0. Cost of FSRU The cost of FSRU ranges between USD 330 .33 equivalent(TOE) 1 trillion British thermal 0.01 0.

Time frame of third party induction in LNG Supply Chain It will take 6-8 months. . X 14 km pipeline Nara . considering that a Business Concern (based on existing terminal tolling model between SSGC and EETPL) is interested in bringing in FSRU (charter agreement confirmed and FSRU is readily available) and committed LNG supply under import contract is available.100 km pipeline from Karachi to Lahore to be laid by Russia (expected completion by February 2017). when the spur line projects: 24" dia. - iv. X 33 km Tando Adam . Clearances required:  OGRA License for setting-up LNG terminal i. Another pipeline project will be executed by China for transport of 690 MMCFD RLNG from GWadar to Nawabshah (expected completion by February 2017). Existing and projected population and demographic characteristics of the location. Envisioned transmission capacity The existing capacity of SSGC's transmission system can be enhanced by 240 MMCFD. iii. Physical aspects of the location. X 358 km pipeline from Karachi (SMS Pakland) to Nara alongwith installation of 6 Compressor Units at Nawabshah (expected completion Jan/Feb 2017).Sawan alongwith installation of compressors (120 MMCF each) at Nawabshah is materialized (expected completion Jan 2016). law enforcement and fire protection capabilities near the location that can cope with a risk caused by the facility. v. 12.Massu pipe line and 42" dia. Medical. Exclusion zone distances from the terminal to property and population as per international standards are complied with. The GoP/MP&NR are also pursuing other pipeline projects 42" Dia X 1. Existing and proposed land use near the location. Another 800 MMCFD will be enhanced after completion of 42" dia. ii.11.

LNG developer (constrained by SSGC transmission capability if gas is to be transported to SNGPL network) 15. b. For fulfilling the 2 BCFD shortfall. Possibility of having integral storage other than FSRU The capital cost of floating storage unit is USD 1. and ix. Proximity to existing gas infrastructure and market. Turkemanistan-Afghanistan-Pakistan gas pipeline project aimed at bringing 1. Need to encourage remote sitting. Alternatives other than LNG The other alternatives to import of LNG are: a. LNG Buyer with its own LNG FSO(floating storage unit) and contract with M/s. 14. c.2 BCFD gas to Pakistan. This will cost around USD 20 .276 million) as operating cost. Environmental considerations  Port Authorities subject to studies by Marine Engineering Consultants  Environmental Protection Agency  Explosives Department 13. vii.325 BCFD gas to Pakistan. viii. Any other significant community concerns.000/tons per annum. Both of the above alternatives are subject to geo-political situation and require at least 18-24 months from start of pipeline construction to first gas delivery.30 million and $ 0. The exploration and production of gas from SHale gas deposits available in Pakistan . Iran-Pakistan gas pipeline project aimed at bringing 750 MMCFD to 1. EETPL for excess capacity of 200 MMCFD (constrained by SSGC transmission capability if gas is to be transported to SNGPL network) b.18/MMBtu (upto USD 138 . Business options available as Third party contract within Existing LSA or investor in independent supply chain a. 20 -30 MMPTA floating storage unit will be required. vi.

000 per day in year 1 and USD 228. Qmax Carriers required for bridging the demand gap of 2 Bcfd Under the existing set-up. FSRU to be available for 347 days in a year). Indigenous gas . This adds up USD 0.6/MMBtu. which amounts to USD 272. d.e.66 on the price of imported LNG.966 MMCFD.e. For 2 Bcfd gas demand.6 years based on capacity charges alone). Substitute Natural Gas i. d. This will require LNG volume of 430. i. Committed RLNG supply to SSGC is 200 MMCFD (capped by annual LNG import of 1. The salient features of the agreement are as under: a. ii. b. utilization of Thar Coal through underground coal gasification to make water gas and on-surface conversion of water gas into Methane (other hydracarbons) through Fischer-Tropsch Process 16.e.Sindh production and Sindh requirement . 17.5 million tons per annum) in year 1 and 400 MMCFD in years 2 till 15 (capped by annual LNG import of 3 million tons per annum). Ltd. there are two constraints: FSRU send-out capacity and transmission capacity. The total gas send-out (at 95% of designed send-out rate) for three FSRUs will be 1. Flexibility fee @ 25% of Utilization charges. 2 similar size FSRUs (gas send-out capacity of 690 MMCFD) in addition to the existing FSRU will be required.005 m 3. Variable utilization charges @ USD 0. The total investment of M/s. c. SSGC pays: i. 18.000 per day in years 2 till 15. EETPL on the project was USD 150 million (payback period of 1. is for a term of 15 years. Fixed capacity charges @ USD 0.06/MMBtu iii. which are capped by 95% annual availability factor (i. The start date of LSA is 29 March 2015. Grey areas in the existing system The existing LSA (LNG Services agreement) between SSGC and Engro Elengy Terminal Pvt. a Qmax ship after every two days. when its gas send-out rate exceeds 300 MMCFD in year 1 and 500 MMCFD in years 2 till 15.

051 Niamat Basal/ Kausar 17 (OPI) 34 2.438 21 Kadanwari (ENI) 93 6.657 10 Sari (OGDC) 3 0.657 15 Badin (BP) 107 7. which is managed by curtailment of gas to CNG and industries.000 The gas demand of SSGC is 1400 MMCFD. TO SSGC’S SUPPLY SOURCES PURCHASES # OVERALL SUPPLY MMCFD % 1 Zarghun (Mari-MCL) 25 1.482 18 Bobi (OGDC) 12 0.380 9 Rehman (Polish Gas) 9 0.847 13 Sujawal (Mari) 11 0.876 19 Adam-X1 Pakho (PPL) 2 0.504 24 Sawan (OMV) 25 1.730 6 Mehar (Petronas) 30 2.00 100.109 3 Jhal Magsi (OGDC) 15 1.803 14 Nur/ Bagla (OGDC) 9 0.788 22 Latif (OMV) 54 3.825 TOTAL 1370.095 4 Mazarani (PPL) 7 0. .876 12 Kunnar/Dar (OGDC) 176 12.942 23 Miano (OMV) 48 3. CONTRIBUTION Sr.511 5 Haseeb (Hycabex) 10 0.219 11 Sinjhoro (OGDC) 12 0.810 16 Kunar (OGDC) 124 9.190 7 Zamzama (BHP) 154 11.146 20 Jakhro (OGDC) 6 0.241 8 Bhit (ENI) 334 24.825 2 Sui (PPL) 70 5.