Pakistan to Begin Selling Excess Gas on International Markets January 1st, Minister Announces
Islamabad, Pakistan – December 7, 2023 – Pakistan will begin selling its excess imported gas on the international market starting January 1st, Petroleum Minister Musadik Malik announced today, in a move aimed at curbing mounting circular debt and stemming financial losses. The decision comes as domestic gas usage for power generation has decreased in recent months, creating a surplus.
according to Minister Malik, the excess gas stems from imports from Qatar and Italian energy company Eni. He stated that diverting the surplus to domestic consumers has contributed to an increase in circular debt within the gas sector and a loss of approximately Rs1,000 billion to Pakistan between 2018-19 and the present.
“From January 1, we will sell this excess fuel in international markets and reduce our burden while limiting the loss caused by it,” Malik saeid during a press conference. He added the measure would allow Pakistan’s state-owned enterprises in the sector to operate at full capacity and generate profit.
The move follows a recent agreement to cancel 21 LNG cargoes under Pakistan’s long-term contract with Eni,part of a broader plan to reduce excess imports.Pakistan is also reportedly in discussions with Qatar regarding gas supplies,exploring options such as deferring cargoes or reselling them under existing contract terms.
Foreign Investment Boost for Petroleum Sector
Minister Malik also highlighted anticipated foreign investment in Pakistan’s petroleum sector.He announced that Turkish Petroleum,in collaboration with Pakistani companies,will participate in onshore and offshore exploration activities for the first time in 20 years,and will open an office in Islamabad employing 10-15 Turkish nationals,alongside Pakistani staff.
A delegation from the State Oil Company of Azerbaijan Republic (SOCAR) is expected to visit Pakistan next week to explore collaboration with local companies for oil and gas exploration. SOCAR will also establish an office in Pakistan and invest in the construction of an oil pipeline from Machike to Thalian, in partnership with Pakistan State Oil (PSO) and Frontier Works Organisation (FWO). Construction of the pipeline is slated to begin within a month or a month and a half.
Moreover, Minister Malik confirmed the finalization of $3.5 billion in private fundraising for the Reko Diq mining project, with banks currently finalizing agreements. Local companies and Canadian mining giant Barrick Gold are expected to invest an additional $3.5 billion in the first phase of the project,bringing the total initial investment to $6-7 billion. A signing ceremony for the Reko Diq project is anticipated at the Prime Minister’s House within the next one to two months.
“We are moving towards decreasing our reliance on imported oil and gas,” Malik concluded.
