ExxonMobil and Universal Gas Distribution Company (UGDC) have signed an agreement to supply liquefied natural gas (LNG) to the transport sector in Pakistan. The move is supported by the Government of Pakistan to gradually decrease reliance on import and focus more on bringing investment.
According to a statement, the agreement was signed between UGDC – the first private company to get gas marketing license, and ExxonMobil, in the American city of Houston. The first shipment of the LNG is expected next month.
Special Assistant to Prime Minister on Petroleum Nadeem Babar said that striking the agreement was an achievement for the investment sector of Pakistan.
“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.
The agreement was signed by UGDC Chief Executive Officer Ghiyas Paracha and ExxonMobil Vice President Richard Rayfield. LNG Market Development Chairman Alex Volkov and Market Development President Irtiza Sayyed, ExxonMobil Country Manager Pakistan Shahrukh Mirza, and senior officials of the petroleum ministry and UGDC were also present on the occasion.
Current Situation in Pakistan
- Pakistan State Oil imports LNG equal to 600 million metric cubic feet/day from Qatar.
- There are two LNG terminals with 1.2 billion cubic feet/day of re-gasification capacity.
- LNG import cost us $3.33 billion in the last fiscal year, which is 35.96% more if compared with LNG import of $2.45 billion a year earlier.
- The Oil and Gas Regulatory Authority (OGRA) estimates that the gas shortfall will increase to 6.6 billion cubic feet/day by 2028.
- The share of natural gas to the country’s energy mix is 48%, and the largest of all.