Islamabad: On Wednesday, National Petroleum Minister Musadik Malik announced that Pakistan’s talks with the Saudi Development Fund regarding the Reko Diq copper-gold project in Balochistan are nearing completion.
The minister shared details of ongoing discussions with the Saudi government on various projects, including Reko Diq and water initiatives. He adressed some rumors about the Iran-Pakistan Gas Pipeline, Malik clarified that the claim of Pakistan receiving an PKR 18 billion notice from Iran for delays is unfounded. He added that neither side has faced any penalty estimate concerning the pipeline project.
Additional updates from the minister’s briefing include:
- Multiple teams are working on electricity pricing, power generation companies (GENCOS), circular debt, and capacity payments.
- A commercial report on a green refinery is expected by December 2024, with 40-50% of its focus on petrochemical production and the rest on crude petroleum, potentially reducing premium costs.
- The winter gas supply deficit will be managed using system gas.
- Imported RLNG has reached 1,000 million cubic feet per day (MMcfd), supplemented by 1,350 MMcfd from local pipelines and 1,200 MMcfd from dedicated local gas sources.
- Efforts are being made to boost investment in oil and gas exploration while ensuring timely payments to exploration and production (E&P) companies. SNGPL has cleared 95% of its dues.
- Collaboration with the Maritime Affairs Division to reduce taxes and port charges on imported RLNG, currently around USD 4 per cargo.
- Seasonal tariffs may be introduced to address winter gas shortages and manage capacity payments in the power sector.
- A focus on price rationalization and Weighted Average Cost of Gas (WACOG) to manage gas prices is underway. The goal is to blend local and imported gas to achieve a price of approximately PKR 1,700-1,800 per MMBtu.
- Subsidies will be provided for lower-income segments through gas price blending. The wellhead price is PKR 570 per MMBtu, pipeline gas is PKR 1,280 per MMBtu, and RLNG is priced at PKR 3,600 per MMBtu.
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