According to Bloomberg, Pakistan State Oil Co., the country’s top fuel importer and retailer, plans to develop a $500 million LNG station as part of its diversification strategy.
The import facility will be built in Karachi and will take four years to complete, according to Chief Executive Officer Syed Muhammad Taha. According to him, the company has reached an agreement with a few significant clients and has initiated basic planning for the project, which would feature Pakistan’s first LNG storage facility.
#PSO plans to build a $500mn #LNG terminal
Pakistan in talks with Arab countries to secure a long-term deal for petrol.🛢️
“Pakistan State Oil expects demand for gasoline & diesel to fall 5% – 7% in the FY23, they do not plan to buy any more fuel oil over the period.” pic.twitter.com/FfQThuAaIL
— Pakistan Stocks 📊📈🇵🇰 (@Stockkse100) September 19, 2022
Read more: Petroleum imports increased by 30pc in August-AHL
Following a decade of decline in domestic production, the South Asian country has become one of the fastest-growing markets for liquefied natural gas, which it mostly uses to generate power.
However, rising fuel prices, exacerbated in part by Russia’s war in Ukraine, have made it difficult to pay for the fuel this year, causing frequent power outages.
Pakistan State Oil, the country’s largest corporation by revenue and owner of a network of 3,500 service stations, may seek a partner for the project, according to Taha. He did not provide specifics on the project’s scale, whether it would be onshore or floating, or when it might be operational.
Currently, the country has two floating LNG import terminals, both near Karachi. Qatar and Mitsubishi Corp. have also stated their intention to invest in Pakistani facilities.
The country has been heavily struck by this year’s rise in fuel prices, and it is now grappling with devastating floods exacerbated by climate change. It revived the International Monetary Fund (IMF) loan programme last month but after massively increasing domestic fuel prices in order to meet the global lender’s preconditions.
Pakistan State Oil forecasts demand for gasoline and diesel to shrink 5% to 7% in the fiscal year that began in July, and it has no plans to purchase any additional fuel oil during that time, according to Taha.
According to him, the government is in discussions with Middle Eastern countries about long-term accords that will meet around 80% of its imported gasoline demand. Pakistan already has similar arrangements in place for LNG and diesel.
Moreover, PSO intends to apply for a license to become a mobile wallet operator and, eventually, to launch a digital bank, and has set aside 1 billion rupees ($17.4 million) to establish a venture capital fund. “So going forward our objective is very clear. We want to venture into different areas,” he said.