Global energy giant ExxonMobil has signed a deal with a private company in Pakistan to supply liquefied natural gas (LNG) with the government planning to gradually move out of the import business.
The agreement was signed between Universal Gas Distribution Company (UGDC) – the first private company to get gas marketing licence – and ExxonMobil in the US, a statement said on Wednesday.
The first shipment of LNG is expected by the next month. Special Assistant to Prime Minister on Petroleum Nadeem Babar termed the signing ceremony as a historic day.
“The deal is an honour for Pakistan and we will promote ease of doing business to promote investment in all the sectors including the energy sector,” Babar said. He added that government wanted to move out of the gas import sector gradually.
The agreement was signed in the American city of Houston between. UGDC Chief Executive Officer Ghiyas Paracha, ExxonMobil Vice President Richard Rayfield, LNG Market Development Chairman Alex Volkov, and Market Development President Irtiza Sayyed,
ExxonMobil Country Manager Pakistan Shahrukh Mirza, senior officials of petroleum ministry, and UGDC attended the ceremony.
At present, state-owned Pakistan State Oil is importing LNG equal to 600 million metric cubic feet / day from Qatar. Pakistan LNG Limited has short and long-term contracts for the import, while shortfalls are secured through spot purchases.
There are currently two LNG terminals with 1.2 billion cubic feet / day of re-gasification capacity. LNG import amounted to $3.33 billion in the last fiscal year, up 35.96 percent compared with LNG import of $2.45 billion a year earlier.
The Oil and Gas Regulatory Authority has estimated that the gas shortfall will increase to 6.6 billion cubic feet / day by 2028 from the existing numbers.
Currently, natural gas is a major contributing fuel to the country’s energy mix. Its share in the primary energy mix is around 48 percent.