ISLAMABAD

Following the government’s recent hike of natural gas tariff by 62.6 percent, the fertilizers prices will be shot up by around Rs 140-160 per bag that will further compound the woes of the poor farmers, already hit by the slump in the agri-products prices.

CEO of the Engro Corporation Limited, Khalid Siraj Subhani, while taking to media here said that after the current hike in gas prices the increase in fertilizer prices is an indispensable. Engro Fertilizers has already increased the fertilizers prices, he added. However, he didn’t disclose the new selling price of the Engro fertilizer and said it may be around Rs140 to 160 a bag. The government has announced increase of up to 62.6 percent in the tariff for different categories of gas consumers, effective from September 1, 2015, with the highest increase for the fertilizer sector.

It is pertinent to mention here that last month in a meeting with Federal Minister Planning and Development, Ahsan Iqbal, the groaning farmers’ representatives resented the PML (N) government apathy towards agriculture sector and blamed the farmers killing policies of the incumbent rulers for the price slump of various agri-products. The farmers’ representatives had demanded the government to reduce the prices of electricity, fertilizer, pesticides and seeds. But once again the government incurred a heavy toll in shape of increase of gas prices which caused the increase in fertilizer prices.

Talking about the LNG terminal and its supply to the national gas system CEO Engro said that currently under the agreement with the government, the quantity in first year has been worked out at 200 million cubic feet a day and doubles it next year. He said that so far, about 25 billion cubic feet gas has been imported, while our terminal’s capacity utilisation is around 85 percent, Subhani disclosed.

The Engro chief said that Pakistani economy has been facing a severe energy crisis. Its local output of the natural gas is around four billion cubic feet a day, while demand, during peak season, is around six to 6.5 billion cubic feet. To plug the gap, as to run factories, feed houses and generate energy, the government has worked to sort the issue out on war footing.

It gave the contract to the Engro Corporation after a bidding process to build a Liquefied Natural Gas (LNG) terminal at Port Qasim. The company completed the project within in 11 months after spending $150 million as capital cost. It also took a floating storage re-gasification unit (FSRU) on lease which having the capacity to deliver 600 million cubic feet/day natural gas directly to Sui Southern Gas Company’s natural gas pipeline system.

Since March 26, the FSRU docked at Port Qasim that also brought around three billion cubic feet, about nine cargos have come to the country and also the FSRU has also sailed thrice to take gas from the exporting point. The government is paying $272,000 to the Engro Elengy Terminal or $1.33 per BTU which will come down to $0.66 per BTU once the government supply of LNG will reach to 400 million cubic feet per day.

He said that the gas transmission companies are facing restraint in its transmission system and cannot push all the required gas from South to North. However he said that the companies are working on both short and long term projects. The short term policies included the up gradation of current transmission system and the long term included the lying of new pipeline, he maintained.

When asked about the scope for another LNG terminal, he said that it is a good step because Pakistan is a huge gas market and despite the government is working on the import of gas project through Pakistan-Iran Gas Pipeline and Turkmenistan, Afghanistan, Pakistan India (TAPI) Pipeline but these projects still need 24 to 40 months for completion. LNG is the best and easy available solution to Pakistan current energy crisis, he added.

Regarding NAB enquiry into LNG terminal contract newly appointed CEO Engro Elengy Terminal Syed Muhammad Ali said that the Accountability Bureau has contacted Engro and they have taken the paper work and copies of the agreement with SSGCL. To a question that why the company is not using LNG in its fertilizer sector, he said that the LNG is comparatively costly than natural gas.

Syed Muhammad Ali said, Engro has completed the LNG terminal venture in record shortest time of 322 day (11 month).