Pakistan and Qatar are in an advanced stage of discussions for the supply of at least four cargoes of liquefied natural gas (LNG), which could pass through the Strait of Hormuz, sources said on Sunday.
They also said that after facing criticism over loadshedding even before the start of summer, the Power Division had already placed an order to the Petroleum Division for arranging around 400 million cubic feet per day (mmcfd) of liquefied natural gas (LNG) for power generation.
LNG imports to Pakistan were disrupted early last month after the closure of the Strait of Hormuz amid a war in the Middle East, which began with US-Israel attacks on Iran. In retaliatory action, Iran targeted fuel installations in some of the Gulf countries that had US assets and bases.
It was against this backdrop that Qatar declared force majeure early last month in all its global LNG contracts, including those with Pakistan.
Sources said that due to the resultant fuel and electricity shortfall, the Power Division made an urgent call for support from all stakeholders for the purchase of LNG cargoes as it came to know about the possibility of Pakistani-flagged ships passing through the Strait of Hormuz.
Qatar’s LNG cargos had earlier also returned from the Hormuz chokepoint.
And while there is no official confirmation of the exact number, sources said at least 25-30 loaded cargoes of Qatar petroleum are believed to be stranded between the processing stations and Hormuz at present.
Pakistan had requested Qatar, at the highest level, to provide at least four of those to it, for which it would also utilise its renewed diplomatic capital, if so required, sources said. The technical teams of the two sides had been engaged on this matter.
A senior government official at the Petroleum Division told the media that while there was a possibility of smooth operations of international fuel supply routes, particularly through the Strait of Hormuz, the Power Division had placed an order of more than 400mmcfd of LNG to meet electricity demand both in the service areas of K-Electric and distribution companies.
These sources said the electricity shortfall would keep on increasing as temperatures would rise in the days ahead, and it would be next to impossible to stabilise the national grid without electricity generation from major power plants, particularly those running on LNG in Punjab that had a total generation capacity of around 6000 megawatts.
On top that, they added, the utilisation of HSD and even furnace oil at current market prices could significantly raise fuel costs.
“With the onset of the summer season, electricity demand has started to rise significantly across the country. In this regard, the availability of regasified liquefied natural gas (RLNG) remains critical for ensuring optimal power generation and maintaining system stability”, the Power Division wrote to the Petroleum Division in a letter.
It highlighted that any shortfall in RLNG supply would necessitate increased reliance on expensive alternative fuels such as HSD. “This would not only result in a substantial increase in the overall cost of generation but would also lead to prolonged hours of load management, thereby increasing the FCA burden on end consumers”, the Power Division explained, the source said.