PSO to set up LNG import terminal worth $500 million
The largest gas importer of Pakistan and fuel retailer, Pakistan State Oil Company, is going to build an import terminal for liquefied natural gas (LNG) at $500 million, according to a Bloomberg News report on Monday.
PSO CEO Syed Muhammad Taha was quoted by the international news agency that the import terminal will be located near Karachi which will take four years to complete.
He said that the company has an understanding with a few large customers and has begun preliminary preparations for the project that will include Pakistan’s first LNG storage facility.
Pakistan has been one of the fastest-growing markets for LNG, which it mainly uses to generate electricity following a decline in local gas production over the last decade. But rising prices, sparked in part by Russia’s war in Ukraine, have seen the country struggle to afford the fuel this year, resulting in frequent blackouts.
“As long as there’s a geopolitical crisis in place, prices will remain elevated, but eventually it will come down,” Mr. Taha said. “As soon as the prices are conducive, we’ll go ahead.”
PSO, which owns a network of 3,500 service stations and is the country’s largest company by revenue, may look for a partner for the project, the CEO said. He didn’t offer exact details on the size of the project, whether it’d be onshore or floating or when it’d become operational.
The country presently has two floating LNG import terminals, both near Karachi. Qatar and Mitsubishi Corporation have also said they plan to invest in terminals.
PSO expects demand for gasoline and diesel to fall 5-7 percent in 2022-23, and doesn’t plan to buy any more fuel oil over the period, Mr. Taha said. The government is in discussions with Middle Eastern countries on long-term deals that will satisfy about 80pc of its imported gasoline requirements, he added. Pakistan already has these types of arrangements for LNG and diesel.
The fuel retailer is also planning to apply for a license to become a mobile wallet operator, and eventually start a digital bank, Mr. Taha said, adding that it’s allocating Rs1 billion to set up a venture capital fund.
“So going forward, our objective is very clear. We want to venture into different areas.”