Saudi Aramco to visit Pakistan for LNG deal

KARACHI: A Saudi Aramco delegation visiting Pakistan this week will discuss plans to sell liquefied natural gas (LNG) to its ally and set up a state-of-the-art terminal, officials have said.

Aramco, which is the world’s largest producer of crude oil, does not currently produce LNG. But it has hired someone from Singapore’s Pavilion Energy Pte. Ltd. to develop this aspect of the business.

A deal with Pakistan would be Aramco’s first LNG sale.

“The Saudis have expressed an interest in selling LNG to Pakistan,” Mahmood Moulvi, an adviser at the Maritime Affairs Ministry told Arab News on Wednesday, adding that the Saudi delegation would also discuss the terminal. “The process of awarding the tender for the LNG terminal will be initiated within a month.”

Sher Afgan Khan, a spokesman for the Ministry of Energy, said Aramco was interested in a refinery as well as LNG imports.

LNG is the fastest-growing hydrocarbon with a growth rate of 4 percent a year. Global demand is expected to exceed 500 million tons a year by 2035, up from nearly 300 million tons a year in 2017.

Pakistan’s domestic gas output has plateaued in the last five years, falling to 1.46 trillion cubic feet in 2017-18, from 1.51 trillion cubic feet in 2012-2013, according to an annual report from the Petroleum Ministry.

It has led to severe gas shortages as Pakistan’s population, now at 208 million, has risen sharply over the same period, driving up fuel demand.

Gas demand was estimated at 6.9 billion cubic feet per day for 2017-18, according to Pakistan’s Oil and Gas Regulatory Authority, nearly 3 billion cubic feet more than daily output.

To help plug the deficit, Pakistan has built two LNG import terminals. Demand is expected to hit 6.97 billion cubic feet a day for 2018-19, and 7.06 billion cubic feet a day in 2019-20.