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Formulation of the Government Policies relating to Natural Gas, Liquid Petroleum Gas (LPG), Liquefied Natural Gas (LNG), Compressed Natural Gas (CNG).
Oil
30 25
Gas
LPG
Coal
Hydro+Nuclear Electriciy
50.4%
Million TOE
20
28.4%
15 10 5 0
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Natural Gas
SSGCL
Mingora
1,150
3,108 763 3,871
37%
100%
29%
79% 21% 100%
Indept. Islamabad
Mirpur
DHODAK 40 MMCFD(SNGPL)
Lahore
PIRKOH + LOTI 42 MMCFD (SNGPL) SUI 430 MMCFD (SNGPL) 110 MMCFD (SSGC) MAZARANI 10 MMCFD (SSGC) KANDHKOT 50 MMCFD (SNGPL) ZAMZAMA 190 MMCFD (SNGPL) 130 MMCFD (SSGC) BHIT 300 MMCFD (SSGC)
Quetta
Sui
Sukkur
REHMAT 30 MMCFD (SNGPL) SAWAN 280 MMCFD (SNGPL) 120 MMCFD (SSGC) KHIPRO 70 MMCFD (SSGC) DARU 5 MMCFD (SSGC)
Karachi
SNGPL 6,729
SSGC 3,294
Distribution (KM)
Towns / Villages No.
52,932
1,019
30,173
1,533
83,105
2,552
Multan
Sui
AC1X-SUI
Sukkur
Karachi
3,871
MMCFD
2,737
2500
2,241
2000 1500 1000 500 0
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Balochistan
NWFP
Punjab
Sindh
Total
2007
Production
Consumption
Balochistan , 225, 7% NWFP, 117, 3%
(3,871 MMCFD)
(3,351 MMCFD)
2006-07
Transport, 155, 5% Power, 1,453, 43% Domestic, 512, 15%
Gen. Industry, 343, 16% Pakistan Steel, 37, 2% Fertilizer (Fuel), 117, 6% Cement, 19, 1% Fertilizer (Feed) 13%
Fertilizer (Fuel), Fertilizer (Feed) 13% 110, 3%
Comm., 86, 3% Gen. Industry, 530, 16% Pakistan Steel, 45, 1% Cement, 40, 1%
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Punjab NWFP Sindh Balochistan Transpot Power Fertilizer Cement Gen. Industry Commercial Domestic
30.06.2001 No. of Towns/Villages Transmission (km) Distribution (km) Gas Sales (MMCFD) No. of Customers Industrial Commercial Domestic Punjab Domestic consumers &age of population benefiting 4,434 46,113 3,401,783 NWFP Sindh 1,414 7,444 56,208 1,411
%age increase 80% 35% 48% 137% 75% 47% 44% Pakistan
Balochistan
2,597,017
352,691
1,770,221
169,993
4,889,922
19%
11%
27%
14%
20%
7,000
6,000
Committed
Anicipated
5,000
Anic
ipate
4,000
3,000
2,000
Committed
1,000
0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Source: DGPC
6,000
5,000
Anic ip
ated
4,000
LN G(
FT LNG ) I
LNG
II
IPI
3,000
Committed
2,000
1,000
Committed
0 2007 2008 2009 2010
Anicipated
2011 2012 2013
LNG (FT)
2014 2015 2016
LNG I
2017 2018
LNG II
2019 2020
IPI
2021 2022 2023 2024 2025
MMcfd
7,000
6,000
Transport (CNG)
MMscf / Day
Captive power
5,000
4,000
3,000
2,000
Gen. Industry
1,000
Commercial Domestic
0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
7,000
6,000
606
5,000 Anicipated 4,000
2,215 4,200
Gap
6,252
3,000
0 2007
2008 2009
2010 2011
2012 2013
2014 2015
2016
2017 2018
2019 2020
2021 2022
2023 2024
2025
Committed
Anicipated
Gap
7,000
Gap
3,792
3,000
0 2007
2008 2009
2010 2011
2012 2013
2014 2015
2016
2017 2018
2019 2020
2021 2022
2023 2024
2025
Committed
Anicipated
LNG (FT)
LNG I
LNG II
IPI
Gap
Maximize domestic production for which new policy has been approved by the Government; Transnational Pipeline; i.e. IPI, TAP and GUSA LNG imports through private as well as public sector. i.e. Mashal LNG, GasPort, and Granada SBM
PRIORITY ORDER
First Second Third
Fertilizer Sector; and Industrial Sector (to the extent of process gas)
Independent Power Plants as well as WAPDA and KESCs Power Plants with firm gas supply commitments under GSAs
I. II. III.
General Industrial Sector CNG Sector Captive Power (for export-oriented textile units)
Fourth
I.
II.
WAPDA and KESCs Power Plants (other than those included in Third Priority Order) Captive Power Sector (other than that for export-oriented textile units)
Fifth
Cement Sector
Sixth
Government approved LNG Policy, 2006 on 6th April,06 under which complete freedom has been given to the investors to participate in any segment of LNG value chain. Main features of LNG Policy 2006 LNG Project Structure: Allow both Integrated or Unbundled Project Structures as may deliver best results i.e. lowest delivered Regasified LNG (RLNG) price for Pakistan. Right to Market and Transport RLNG: The investors allowed freedom to market and transport RLNG in Pakistan at their own risk and cost. Government Incentives: Accelerated depreciation for income tax purposes and waiver of import duty allowed. Licensing required from OGRA: OGRA is bound to issue license within 90 days for:
Ownership and operations of LNG terminal Right to market and sell RLNG Using existing pipeline infrastructure if available Construct and operate gas pipeline if required
Sui Southern Gas Company Ltd (SSGC) is working as project facilitator for Pakistans First LNG Import project called Pakistan Mashal LNG Project. The project is in its advance stages and close to selection of the Project Company / Developer. The Mashal LNG Project is designed to import 3.5 MTPA of LNG (500 mmcfd gas ) in 2010/11. ECC approved integrated project structure for this project on 2nd Feb,07 and gave go ahead to SSGC to obtain technical and financial proposals from the pre-qualified bidders. Short listing of the pre-qualified companies done; SSGC sought price proposals from pre-qualifying interested bidders on the basis of which successful project developer will be selected by the end of December 2007.
As per LNG Policy 2006, equal opportunity provided to private sector investors to import LNG and setup LNG terminals at their own risk and cost. Presently, couple of private sector investor namely Pakistan GasPort Ltd. (PGPL, an Associated Group Company), and Granada SBM are pursuing LNG projects.
PGPL has signed an implementation agreement with Port Qasim Authority to setup an LNG terminal with an intent to import upto 400 MMCFD LNG.
Gas Prices
Wellhead price:
It is paid to the producers in accordance with the Petroleum Concession Agreements (PCAs) and applicable policy at the wellhead. It is determined by OGRA after taking into account the following elements
Prescribed price:
Average well head gas price Excise duty at well head Operating and maintenance costs Depreciation Return on assets (ROA) (17.5% SNGPL, 17% SSGCL)
Wellhead Price
Gas Producers
Prescribed Price
SNGPL
SSGCL
Consumers Price
Consumers
Consumers
Direct Sale
Depreciation 3% T&D 8%
Domestic Sector: Over 0-50m3 per month Over 50-100m3 per month Over 100-200m3 per month Over 200-300m3 per month Over 300 m3 per month Commercial Consumers Industrial Consumers
CNG
Cement Factories Fertilizer Companies: Feed stock: New Old Fuel: Power Sector including Captive Power:
264.87
305.15
Presently around 1650 tons / day of LPG is being produced by 10 LPG producers and is being marketed by 63 LPG Marketing Companies.
Around 51 companies have been given provisional LPG marketing licenses. The combined storage facility of all LPG marketing companies is around 28,000 metric tons. Two LPG import terminals located at Port Qasim, Karachi, are functional. EVTL LPG import terminal has storage capacity of 4500 metric tons and through put capacity of 100,000 metric tons per annum. Progas LPG import terminal has storage capacity of 6750 metric tons and through put capacity of 500,000 metric tons per annum. Around Rs 6,000 million of investment has been made into PG infrastructure since December, 2006.
Prior to September 2000, Ministry of Petroleum & Natural Resources (MPNR) was regulating LPG business all over the country under LPG (P&D) Rules, 1971. In June 2000 the Cabinet decided to deregulate the LPG business. Since deregulation the Government is not fixing the price for the producers as well as the consumers.
In March, 2003, all LPG regulatory work along with LPG (P&D) Rules, 2001 were transferred to OGRA. The role of MPNR is now confined to policy formulation only. First LPG Production & Distribution Policy has been introduced in 2006;
To ensure that cartels are not formed for charging a high consumer price of LPG, OGRA will determine the reasonableness of price keeping in view the import parity price of LPG, producer price and audited accounts of LPG marketing companies for the last two years. All LPG marketing companies receiving LPG from sources in Punjab and NWFP will be obligated to supply at least 7% of their local LPG in Northern Areas, 7% in AJK and 6% in FATA. All LPG marketing companies receiving LPG from sources in Sind and Balochistan will be obligated to supply at least 10% of their local LPG in Balochistan province. 80% of LPG produced from Chanda field (OGDCL) shall be distributed in FATA.
Any party can import LPG after paying applicable government dues. However, no party can export LPG without the prior written approval of MPNR.
In order to incentivise local LPG producers to increase their production and to ensure free flow of imported LPG to enhance its availability for LPG consumers at affordable prices, the government placed a floating cap on the producer price of LPG by linking it to the international price. The LPG producer pricing formula was approved by the ECC of the Cabinet in its meeting held on 06.12.2006 is as follow:
The maximum base-stock price of LPG for a given month should be equal to FOB Saudi ARAMCO Contract Price (CP) for Propane and Butane published in PLATTs for that month taking Propane-Butane ratio equal to 40:60. However, for the benefit of the consumers, the LPG producers will have complete flexibility and authority to sell product at a price on commercial considerations in accordance with market situation.
Compressed natural gas (CNG) being promoted for economic and environmental benefits 1,834 CNG stations serving over 1.55 million vehicles; Pakistan 2nd largest in world, and largest in Asia. CNG kits and dispensers are being manufactured locally Cabinet approved replacing diesel buses with CNG buses in 8 cities leading to new investment. CNG Policy is under finalization.
Thank You