Universal Gas Distribution Company (UGDC) signed an LNG purchase deal with a Singapore-based firm, Trafigura, on Thursday.
Trafigura has reconfirmed its cooperation agreement for the terminal capacity and supply of LNG/gas to UGDC.
The agreement was signed by heads of the two companies in Houston, United States, according to the statement issued by the company. The agreement was signed by the CEO of UGDC Ghiyas Abdullah Paracha and Fadi Mitri, Business Development and Origination- LNG and Gas, Trafigura.
The UGDC Chief Executive Officer Ghiyas Paracha said:
Trafigura has a long presence in Pakistan and it owns the excess capacity (not contracted by PLTL) in the terminal of Pakistan Gas Port Consortium Limited (PGPC). Trafigura will use some of its capacity to import LNG and sell gas to the UGDC.
This will not only help the government to save foreign exchange but also reduce the risk of the government while encouraging the private sector and foreign investment.
Last week, ExxonMobil, the world's largest oil and gas company, had signed a gas supply agreement with UGDC to supply LNG to the country's transport sector.
He said the cooperation between Trafigura, UGDC, and ExxonMobil in how the private sector can be effective in satisfying the needs of the gas sector in Pakistan.
Trafigura and UGDC have reached an understanding on the cooperation agreement last year, but could not actualize it for an LNG supply and import arrangement. With ExxonMobil's commitment to supplying at least four LNG shipments a year, the two firms have now formalized the agreement for the supply of 50-80mmcfd.
Speaking at the occasion, CEO of UGDC Ghiyas Paracha said that according to the ECC decision of July 2019 and Cabinet's decision of August 2019, the private sector can use the additional private capacity of LNG terminals.
He also said that the UGDC will not only buy gas from Trafigura but also plans to import LNG from other sources with Trafigura's support.
He appreciated the decision of the government to allow the construction of five LNG terminals in the private sector.
Mr. Paracha also said that the agreement will enable CNG sales at least 30pc cheaper than the petrol price. Based on this price differential, we are hopeful that two million fresh vehicles will convert to CNG in two years, he added.
Source: Pro Pakistani