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Three important decisions taken to fix Pak’s gas sector issues

Minister for Energy Hammad Azhar on Thursday said three important decisions had been taken in the last three months to fix the gas sector’s issues. The minister said that ban had been imposed on new domestic schemes till the weighted average cost of gas (WACOG) pricing.

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In a tweet, the minister said that ban had been imposed on new domestic schemes till the weighted average cost of gas (WACOG) pricing. Third-Party Access to pipelines granted for upcoming LNG terminals, he said.

He said fast paced agreements with Russia over north-south pipeline.

Pakistan’s gas reserves are depleting at an alarming rate of nine percent per annum whilst our energy needs and the size of the population are growing. To bridge the gap, we import LNG from abroad, but there are two major issues with that practice. Firstly, we have no LNG storages, and therefore the cargoes must be perfectly timed. That is the reason the current supply chain has no flexibility.

Read more: Qatar Petroleum places order of four LNG carriers with Hudong

Any interruption in supply or demand creates disruptions throughout the energy chain. Secondly, the current gas pricing mechanism in Pakistan does not allow us to fully recover from the customers the cost of the LNG cargoes. Therefore, our ability to use imported gas to meet the unmet demand in our local economy is limited.

Energy stocks are set to open higher, as weaker oil and natural gas prices are being offset by sharply rising broader index futures. S&P 500 futures were recently indicating gains at the open of nearly 1%. News flow in the energy sector is light as the earnings season is quickly approaching.

The OPEC+ will also increase oil output by 400,000 barrels per day in December and thus made a decision not to accelerate production growth, according to a communique adopted after the Thursday meeting.

Read more: Qatar Petroleum places order of four LNG carriers with Hudong

“Reconfirm the production adjustment plan and the monthly production adjustment mechanism approved at the 19th OPEC and non-OPEC Ministerial Meeting and the decision to adjust upward the monthly overall production by 0.4 mb/d for the month of December 2021, as per the attached schedule,” the

The alliance also decided to “hold the 23rd OPEC and non-OPEC Ministerial Meeting on 2 December 2021.”

APP with additional input by GVS