Latest news with #OGDCL
Zawya
a day ago
- Business
- Zawya
Pakistan looking to sell excess LNG amid supply glut curbing local gas output
Pakistan is exploring ways to sell excess liquefied natural gas (LNG) cargoes amid a gas supply glut that could cost domestic producers $378 million in annual losses, according to a presentation and a government official familiar with the matter. The country has at least three LNG cargoes in excess that it imported from top supplier Qatar and has no immediate use for, and is currently selling natural gas at steep discounts to local users, a second government official said. Power generation from gas-fired power plants, which has historically accounted for a lion's share of LNG use in the country, has declined for three straight years ended 2024, with cheaper solar power use dramatically gaining at the expense of gas-fired generation, data from energy think-tank Ember showed. That has forced domestic producers of the fuel to curb production. Pakistan is currently exploring the possibility of transferring LNG cargoes to rented tankers for "offshore storage and onward sale," state-owned oil and gas producer OGDCL said in a presentation to industry and government. "Excess LNG in the gas network has resulted in significant production operations impact for local exploration and production companies over last 18 months," OGDCL said, adding that it had forced curtailment of domestic supply. The domestic industry could suffer $378 million in losses over the next 12 months at the current rate of curtailment, according to the presentation dated May 29 reviewed by Reuters. It is not immediately clear if Pakistan's long-term LNG import contracts with QatarEnergy allows for a resale of cargoes. One of the government officials said the country was still exploring ways to do it. Qatar typically has a destination clause in long-term supply contracts with buyers that restrict where the cargoes can be sold. QatarEnergy did not immediately respond to a request seeking comment. Pakistan has already deferred five contracted LNG cargoes from Qatar without financial penalty, shifting delivery from 2025 to 2026, as the country grapples with surplus capacity. Pakistan's petroleum minister Ali Pervaiz Malik declined to comment on the presentation, but said renegotiating contracts with Qatar was a "complex" process that could take at least a year, and a final decision on initiating it had yet to be made. "While the existing contract with Qatar allows Pakistan to decline vessels, doing so incurs penalties and other complications," Malik told Reuters. The glut has stemmed from several gas-fired power plants, previously operating under must-run contracts, now being sidelined, Malik said. "It was expected that summer season will create extraordinary demand but the trend indicates the opposite," OGDCL said in the presentation. (Reporting by Ariba Shahid and Sudarshan Varadhan; editing by David Evans)
Business Recorder
a day ago
- Business
- Business Recorder
Pakistan looking to sell excess LNG amid supply glut curbing local gas output: document
KARACHI/SINGAPORE: Pakistan is exploring ways to sell excess liquefied natural gas (LNG) cargoes amid a gas supply glut that could cost domestic producers $378 million in annual losses, according to a presentation and a government official familiar with the matter. The country has at least three LNG cargoes in excess that it imported from top supplier Qatar and has no immediate use for, and is currently selling natural gas at steep discounts to local users, a second government official said. Power generation from gas-fired power plants, which has historically accounted for a lion's share of LNG use in the country, has declined for three straight years ended 2024, with cheaper solar power use dramatically gaining at the expense of gas-fired generation, data from energy think-tank Ember showed. That has forced domestic producers of the fuel to curb production. Pakistan is currently exploring the possibility of transferring LNG cargoes to rented tankers for 'offshore storage and onward sale,' state-owned oil and gas producer OGDCL said in a presentation to industry and government. PM Shehbaz sets up panel for petroleum sector reforms 'Excess LNG in the gas network has resulted in significant production operations impact for local exploration and production companies over last 18 months,' OGDCL said, adding that it had forced curtailment of domestic supply. The domestic industry could suffer $378 million in losses over the next 12 months at the current rate of curtailment, according to the presentation dated May 29 reviewed by Reuters It is not immediately clear if Pakistan's long-term LNG import contracts with QatarEnergy allows for a resale of cargoes. One of the government officials said the country was still exploring ways to do it. Qatar typically has a destination clause in long-term supply contracts with buyers that restrict where the cargoes can be sold. QatarEnergy did not immediately respond to a request seeking comment. Pakistan has already deferred five contracted LNG cargoes from Qatar without financial penalty, shifting delivery from 2025 to 2026, as the country grapples with surplus capacity. Pakistan to renegotiate Qatar LNG deal amid high costs, paper says Pakistan's petroleum minister Ali Pervaiz Malik declined to comment on the presentation, but said renegotiating contracts with Qatar was a 'complex' process that could take at least a year, and a final decision on initiating it had yet to be made. 'While the existing contract with Qatar allows Pakistan to decline vessels, doing so incurs penalties and other complications,' Malik told Reuters. The glut has stemmed from several gas-fired power plants, previously operating under must-run contracts, now being sidelined, Malik said. 'It was expected that summer season will create extraordinary demand but the trend indicates the opposite,' OGDCL said in the presentation.
Arab News
a day ago
- Business
- Arab News
Pakistan looking to sell excess LNG amid supply glut curbing local gas output — document
KARACHI/SINGAPORE: Pakistan is exploring ways to sell excess liquefied natural gas (LNG) cargoes amid a gas supply glut that could cost domestic producers $378 million in annual losses, according to a presentation and a government official familiar with the matter. The country has at least three LNG cargoes in excess that it imported from top supplier Qatar and has no immediate use for, and is currently selling natural gas at steep discounts to local users, a second government official said. Power generation from gas-fired power plants, which has historically accounted for a lion's share of LNG use in the country, has declined for three straight years ended 2024, with cheaper solar power use dramatically gaining at the expense of gas-fired generation, data from energy think-tank Ember showed. That has forced domestic producers of the fuel to curb production. Pakistan is currently exploring the possibility of transferring LNG cargoes to rented tankers for 'offshore storage and onward sale,' state-owned oil and gas producer OGDCL said in a presentation to industry and government. 'Excess LNG in the gas network has resulted in significant production operations impact for local exploration and production companies over last 18 months,' OGDCL said, adding that it had forced curtailment of domestic supply. The domestic industry could suffer $378 million in losses over the next 12 months at the current rate of curtailment, according to the presentation dated May 29 reviewed by Reuters. It is not immediately clear if Pakistan's long-term LNG import contracts with QatarEnergy allows for a resale of cargoes. One of the government officials said the country was still exploring ways to do it. Qatar typically has a destination clause in long-term supply contracts with buyers that restrict where the cargoes can be sold. QatarEnergy did not immediately respond to a request seeking comment. Pakistan has already deferred five contracted LNG cargoes from Qatar without financial penalty, shifting delivery from 2025 to 2026, as the country grapples with surplus capacity. Pakistan's petroleum minister Ali Pervaiz Malik declined to comment on the presentation, but said renegotiating contracts with Qatar was a 'complex' process that could take at least a year, and a final decision on initiating it had yet to be made. 'While the existing contract with Qatar allows Pakistan to decline vessels, doing so incurs penalties and other complications,' Malik told Reuters. The glut has stemmed from several gas-fired power plants, previously operating under must-run contracts, now being sidelined, Malik said. 'It was expected that summer season will create extraordinary demand but the trend indicates the opposite,' OGDCL said in the presentation.
Reuters
a day ago
- Business
- Reuters
Exclusive: Pakistan looking to sell excess LNG amid supply glut curbing local gas output
KARACHI/SINGAPORE, July 1 (Reuters) - Pakistan is exploring ways to sell excess liquefied natural gas (LNG) cargoes amid a gas supply glut that could cost domestic producers $378 million in annual losses, according to a presentation and a government official familiar with the matter. The country has at least three LNG cargoes in excess that it imported from top supplier Qatar and has no immediate use for, and is currently selling natural gas at steep discounts to local users, a second government official said. Power generation from gas-fired power plants, which has historically accounted for a lion's share of LNG use in the country, has declined for three straight years ended 2024, with cheaper solar power use dramatically gaining at the expense of gas-fired generation, data from energy think-tank Ember showed. That has forced domestic producers of the fuel to curb production. Pakistan is currently exploring the possibility of transferring LNG cargoes to rented tankers for "offshore storage and onward sale," state-owned oil and gas producer OGDCL said in a presentation to industry and government. "Excess LNG in the gas network has resulted in significant production operations impact for local exploration and production companies over last 18 months," OGDCL said, adding that it had forced curtailment of domestic supply. The domestic industry could suffer $378 million in losses over the next 12 months at the current rate of curtailment, according to the presentation dated May 29 reviewed by Reuters. It is not immediately clear if Pakistan's long-term LNG import contracts with QatarEnergy allows for a resale of cargoes. One of the government officials said the country was still exploring ways to do it. Qatar typically has a destination clause in long-term supply contracts with buyers that restrict where the cargoes can be sold. QatarEnergy did not immediately respond to a request seeking comment. Pakistan has already deferred five contracted LNG cargoes from Qatar without financial penalty, shifting delivery from 2025 to 2026, as the country grapples with surplus capacity. Pakistan's petroleum minister Ali Pervaiz Malik declined to comment on the presentation, but said renegotiating contracts with Qatar was a "complex" process that could take at least a year, and a final decision on initiating it had yet to be made. "While the existing contract with Qatar allows Pakistan to decline vessels, doing so incurs penalties and other complications," Malik told Reuters. The glut has stemmed from several gas-fired power plants, previously operating under must-run contracts, now being sidelined, Malik said. "It was expected that summer season will create extraordinary demand but the trend indicates the opposite," OGDCL said in the presentation.
Yahoo
2 days ago
- Business
- Yahoo
New Energy Discovery Could Help Pakistan Cut Costly Fuel Imports
Pakistan Oilfields Limited (POL) and Oil and Gas Development Company Limited (OGDCL) have announced the successful completion of hydrocarbon production testing at the Makori Deep-03 Development Well in the TAL Block in Khyber Pakhtunkhwa. Drilling operations reached a final depth of 3,887 meters and yielded 2,112 barrels per day of condensate and 22.08 million standard cubic feet of gas per day (MMSCFD), according to a filing by POL. POL holds a 25% working interest in the block, while OGDCL has a 27.763% stake. Production is expected to commence within the next two months, pending completion of surface infrastructure. Earlier this year, Pakistan and Turkey signed a memorandum of understanding to jointly explore offshore opportunities in Pakistan's territorial waters. While specifics remain under wraps, the Petroleum Division framed the agreement as a platform for attracting foreign direct investment (FDI) and facilitating the transfer of upstream technologies. 'We believe that this strategic collaboration will bring much-needed FDI to Pakistan and pave the way for the sharing and deployment of international technologies, expertise and skillsets,' said the Ministry in a statement issued in April. The country's broader offshore potential has long been touted but remains largely untapped. Local media reports have described the recent discovery as one of the largest in the region, though these claims are not substantiated by international geological surveys. Former Oil and Gas Regulatory Authority (OGRA) member Muhammad Arif told Dawn TV that if the find turns out to be a gas reservoir, it could eventually displace costly LNG monetizing these resources will not come cheaply. Exploration alone could require upwards of $5 billion in investment. According to The Economic Times, Pakistan currently imports 85% of its crude oil, 29% of its natural gas, 50% of its LPG, and 20% of its coal. The country's energy import bill stood at $17.5 billion in 2023 and is projected to nearly double by 2030. Energy Minister Mohammad Ali recently estimated that an investment of $25 billion to $30 billion would be sufficient to extract just 10% of the country's estimated 235 trillion cubic feet (TCF) of gas over the next decade. Speaking to reporters in late 2024, Ali suggested that such a development could reverse Pakistan's declining domestic gas production and significantly reduce foreign exchange outflows. But foreign interest remains tepid. A 2023 auction for 18 onshore and offshore oil and gas blocks failed to attract significant international participation. Around the same time, Shell Plc announced it would exit the country, agreeing to sell its Pakistan business to Saudi Aramco as part of a broader restructuring of its global downstream portfolio. Security risks have also complicated Pakistan's energy investment outlook. In March 2024, five Chinese engineers were killed in a suicide attack while working on the Dasu hydropower project in northern Pakistan. Insurgents from the Balochistan Liberation Army (BLA) also stormed the Gwadar Port Authority complex, targeting Chinese interests in the southwest. The attacks led to the temporary suspension of several projects under the China–Pakistan Economic Corridor (CPEC), Beijing's flagship $62 billion infrastructure initiative in the country. Launched in 2015 as part of China's Belt and Road Initiative, CPEC has poured an estimated $25.4 billion into Pakistan. Its power projects have added around 6,000 megawatts to the national grid and expanded the transmission network by roughly 1,000 kilometers, according to the Pakistan Planning Commission. CPEC has also financed the construction of approximately 500 kilometers of highways, a notable achievement for a country grappling with chronic infrastructure shortfalls. Yet the returns have fallen short of expectations. Pakistan's external debt has ballooned to $100 billion, with roughly one-third owed to China. The country is navigating a severe balance of payments crisis, dwindling foreign exchange reserves, and surging inflation that now approaches 30%. Food prices have risen by more than 40%, and nearly 45% of Pakistan's 250 million citizens live below the poverty line, according to World Bank estimates. In this context, the discovery at Makori Deep-03 is a promising development. However, converting potential into production will demand capital, security guarantees, and political stability, all of which remain in short supply. By Alex Kimani for More Top Reads From this article on Sign in to access your portfolio
