E&P activities to get CPEC like security cover by government

The government of Pakistan has reportedly decided to provide special security to the Oil Exploration and Production (E&P) companies for their protection.

This was mentioned in the recent tweets by SAPM Tabish Gauhar.

Longer Term (3+ Years) :

1- Accelerated Exploration & Production Activities : pic.twitter.com/htKEcseBAh

— Tabish Gauhar (@TabishGauharPK) July 9, 2021

Profit reported that according to their sources, the government has decided this keeping in mind the security issues that the E&P activities face in the remote areas of KP and Balochistan.

Thus, after consultations with relevant stakeholders government has decided to provide companies with CPEC-like security, Profit wrote. This means that a special force of the armed forces will be formed for the security and safety of E&P projects in the country.

In an attempt to implement the reformation of the gas sector of Pakistan, the government of Pakistan has devised a strategic workstream that is further divided into 3 parts; short-term, medium-term, and long-term.

This was explained by the Special Assistant to the Prime Minister for Power and Petroleum Tabish Gauhar in a series of Tweets recently, where he revealed the goals and aims for the three workstreams.

Short Term

In short term, within six to twelve months, the government will optimize the utilization of the excess LNG Terminal Capacity.

Our govt is determined to reform the gas sector and for this purpose we have devised a strategic work stream that is further divided into 3 parts; short term, medium term and long term.

Short Term (6-12 months) :

1 – Utilizing the Excess LNG Terminal Capacity : pic.twitter.com/gSFMe6V5vQ

— Tabish Gauhar (@TabishGauharPK) July 9, 2021

The picture mentioned that the two RLNG terminals could get an increased capacity of up to 300 MMCFD to bridge the demand-supply gap in the country, especially in the coming winters for domestic gas consumers.

The second plan for the short term is a Virtual LNG Pipeline from Gwadar. The post mentions that a few parties have proposed supplying up to 300 MMCFD of LNG to customers via cryogenic road tankers from Gawadar.

Read More: Pakistan secures $4.5bn ITFC financing for LNG, Oil imports

This could potentially make the 150 MMCFD of RLNG currently retained by SSGC in their system, and release the same to meet the deficit up north in the SNGPL system, the post said.

The third short-term plan mentioned by Mr. Gauhar is the new LPG policy. He mentioned that the government has a draft LPG policy ready to be approved by end of July 2021, with the goal to enhance/accelerate the supply of LNG to domestic consumers and thereby reduce the burden on Natural gas provision via a pipeline network.

The fourth, and last short term plan is to remove the price anomaly between the price of indigenous and imported gas, and the associated adverse impact on the sector’s financial sustainability, the long-awaited political consensus on Weighted Average Cost of Gas (WACOG) is expected to be reached, ideally before the year-end.

Medium Term

According to SAPM Tabish Gauhar, in more than two years, the medium-term plan includes adding two new RLNG terminals. He mentioned that Pakistan needs at least one additional import terminal by 2023, without any “take or pay” commitment.

Medium Term (2+ Years) :

1- Additional RLNG Terminals : pic.twitter.com/fiObLV0Vgt

— Tabish Gauhar (@TabishGauharPK) July 9, 2021

The second medium-term plan is to set up on-ground LNG storage infrastructure facilities at Port Qasim. This would have up to 10 days of storage in its initial phase. The post mentions that OGRA is finalizing third-party access rules regarding this. Government plans to form PPP in this with GOP being the 51 per cent stakeholder.

The third medium-term plan is to make substantial progress with the Russian consortium in the next couple of months on the North-South Gas Pipeline (NSGPL).