Pakistan plans to enter into long-term LPG supply contracts with other countries

• Government to enter into long-term government-to-government LPG supply contracts.
• Sui Southern and Sui Northern have reportedly been asked to ensure footprint in LPG cylinder market by procuring 500,000 cylinders each at an earlier stage.
• In Pakistan, the total annualised demand of LPG is estimated at around 1.4 million tons, of which around 876,000 million tons is produced locally, while the balance needs to be imported.

ISLAMABAD: Pakistan plans to enter into long-term government-to-government LPG agreements, senior officials from the petroleum division confirmed in a major development as per a report in The News Thursday.

Gas companies Sui Southern and Sui Northern have been asked to develop their stakes in the LPG cylinders market for this purpose.

“Yes, we have decided to have sustainable LPG supply in the country knowing the fact that the load gas production has dwindled to 2.8 billion cubic feet per day from 4.2 bcfd over the years. We have planned to enter into long-term government-to-government contracts with various countries for LPG supply," the officials from the petroleum division were quoted as saying by the publication.

Sui Southern and Sui Northern have been asked to ensure their footprint in the LPG cylinder market by procuring 500,000 cylinders each at an earlier stage, the officials said.

Talks by Pakistan's government will be initiated soon with Oman for LPG supply under this plan for long-term contracts, the officials said, adding that Saudi Arabia and Qatar are also the biggest LPG producing countries in the Middle East.

According to the publication, authorities in Saudi Arabia and Qatar will also be contacted by the government for the long-term LPG supply agreements.

In case the US sanctions are removed, the government will also prefer to import LPG from Iran, it was reported.

Currently, private importers import LPG both through sea and onshore routes. Importers also import LPG from Iran through Taftan, which is substandard.

“The government wants to discourage piped gas supply and encourage the masses to utilise LPG to the maximum. In India, there is no piped gas facility available and all dwellers there use the LPG," an official was quoted as saying.

Similarly, in China, the government possesses 40% of the LPG market to ensure sustainable supply of LPG to the masses.

In Pakistan, the total annualised demand of LPG is estimated at around 1.4 million tons, of which around 876,000 million tons is produced locally, while the balance needs to be imported from neighbouring countries.

The demand for LPG, locally, is consistently increasing and production is stagnant, leading to increased imports. In winters, the demand increases by around 25% due to its use for heating gas in Punjab, Khyber Pakhtunkhwa and Gilgit-Baltistan.