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ISLAMABAD: The Oil and Gas Regulatory Authority (OGRA) has cautioned that the allocation of regasified liquefied Natural Gas (RLNG) to the domestic sector must be carefully weighed against net proceeds for development (NPD), price transparency, ongoing and future contract negotiations, and the expiry of Pakistan’s long-term LNG supply deal in 2031.
The regulator’s observations came in a proposal submitted ahead of a high-level Pakistani delegation’s visit to Qatar, led by Petroleum Minister Ali Pervaiz Malik, to renegotiate LNG contracts — a process expected to take at least three months.
While commenting on a Petroleum Division summary to the Cabinet Committee on Energy (CCoE) seeking “Relaxation of Moratorium for Provision of New Domestic Connections on RLNG,” OGRA agreed to lift the ban. However, it emphasised that gas allocation and management remain the federal government’s policy domain.
OGRA pointed out the steep tariff disparity between consumer categories: indigenous gas users in the lowest slab pay a minimal rate, while RLNG customers face charges of Rs 3,600–4,000 per MMBTU and LPG users pay even higher at Rs 4,705–5,500 per MMBTU. The authority suggested that these cost differences should be publicly advertised to ensure informed consumer consent.
The regulator also warned that nullifying older applications for indigenous gas connections could invite litigation. Yet, it noted that the higher cost of RLNG might drive energy conservation, thereby keeping overall consumption under check.
Proposed RLNG Framework
The Petroleum Division has suggested a new framework for domestic RLNG connections:
- Annual RLNG connection targets to be reviewed by OGRA, based on supply availability and Sui companies’ processing capacity.
- Applicants who already paid for indigenous gas connections will get priority if they pay the cost differential and sign exclusive RLNG contracts.
- Merit lists will be based on the date of differential/security payments.
- Up to 50% of yearly quotas may be fast-tracked under urgent fee schemes, with connections provided within three months.
- Sui companies will cease accepting new indigenous gas applications and only process RLNG-based requests.
- Reconnection cases older than a year will automatically shift to RLNG, subject to revised contracts.
- A separate list will be maintained for new bulk or special RLNG domestic connections.
Planning Ministry’s Reservations
The Ministry of Planning, Development, and Special Initiatives supported the shift, citing surplus RLNG supply due to falling demand from the power and captive power sectors. It, however, suggested that applicants already on waiting lists should be given the choice to opt for RLNG connections before voiding previous merit lists.
The ministry also cautioned that while the measure may temporarily absorb surplus RLNG, long-term sustainability requires structural reforms. Declining local gas production, rigid LNG contracts, and increasing reliance on imports could add USD 6–8 billion annually to the import bill by 2030, worsening the energy trade deficit already above USD 20 billion.
It urged reforms such as incentivising domestic exploration, upgrading infrastructure, renegotiating LNG contracts for seasonal flexibility, curbing gas flaring, and investing in additional Floating Storage Regasification Units (FSRUs) to safeguard affordability, energy security, and competitiveness.
