The first cargo of Liquefied Natural Gas (LNG) exported by Qatari supplier, Qatargas, is scheduled to reach the Port Qasim LNG terminal on March 26.

Sources said that Qatar is providing the LNG to Pakistan at $8 to $9 per Million British Thermal Units (MMBTU).

The need to import LNG is a result of the relatively higher cost of power generation through furnace oil and diesel fuel.

Earlier this month, Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi had said “Pakistan heavily relies on its import of furnace oil and diesel to fuel power stations and both fuels are relatively expensive as compared to LNG, which is cheaper and a more efficient alternative. LNG is also cleaner and considered environment-friendly,”

According to official sources at the Ministry of Petroleum and Natural Resources, the first cargo of LNG will arrive in Karachi on March 26.

The Qatari government has informed the Petroleum Ministry and Engro Corporation Ltd that the filling of 68,000 cubic feet of LNG in the Q-Flex LNG carrier is currently underway.

After the cargo reaches Pakistan, the LNG will be re-gasified and, on March 31, injected into the Sui Southern Gas Company Ltd (SSGCL) network through Engro’s re-gasification terminal at Port Qasim.

The SSGCL is then required to transfer it to the Sui Northern Gas Pipelines Ltd (SNGPL) at the Zamzama-Sawan gas establishment.

The LNG will initially be provided to four Independent Power Producers (IPPs) in Punjab, including Kot Addu Power Company (Kapco).

In the second phase of the operation, fuel will be used for Compressed Natural Gas (CNG) and in the third, it will be supplied to the fertiliser sector.

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The $135 million Engro Elengy Terminal Limited (ETPL) — a subsidiary of Engro Corporation terminal at Port Qasim ─ was completed in record time, according to Shaikh Imran-ul-Haq CEO of ETPL (who made this claim earlier in March).

Imran-ul-Haq had gone on to say “If the commodity is not delivered by March 31, 2015, the government would be liable to pay the capacity charges.”

The cost to the government of not utilising the ETPL would be $272,000 per day after March 31.

Concerns over the specifications of the terminal were raised by Qatargas with the Port Qasim Authorities (PQA) at a meeting on March 9. Qatargas officials said a series of steps were required to be completed by PQA “as soon as possible in order for the terminal to be accessible”.