ISLAMABAD: Receding oil prices and oversupply has hit the LNG market where buyer has become the decision maker therefore Pakistan can use to opportunity to settle energy crisis, a business leader said Wednesday.
Many countries and multinationals have shelved LNG project while many have been delayed due to the negative outlook, said Patron Islamabad Chamber of Small Traders Shahid Rasheed Butt.
He said that Australia is worst it where 200 billion have been invested in the LNG projects while US LNG industry is also facing the heat as it can only become profitable when oil is traded at 75 dollar a barrel which is not likely in a decade.
He said that a price war seems on the horizon in which Qatar will emerge as winner as it is not only producing 31 percent of the global supply but its production cost is lowest in the world. Despite slump, the LNG supply which is 245 million tonnes per annum (MTPA) will be increased to 297 MTPA by 2017.
Projects producing 100 MTPA have been completed recently while other 600 MTPA projects are under consideration. He said that slump in Chinese economy has reduced LNG demand by six percent and Japans decision to bring nuclear power plants online in a phased manner will further reduce demand while will make it a buyer’s market.
This is a golden opportunity for Pakistan to finalise LNG supply agreements on lowest possible rates to tame energy crisis and revive economy, Butt said.