Pakistan's LNG plans hit as ExxonMobil pulls out

Exxon has decided to pull out of Pakistan because it had "issues with partners", particularly the developer, GEIL. Photograph:( Reuters )

WION Web Team Pakistan Oct 31, 2017, 08.39 AM (IST)

In a big blow to Pakistan's energy needs, American oil giant ExxonMobil has decided to quit Pakistan over differences among the six-member group behind the project in Port Qasim, Karachi.

The deal is set to hit Pakistan's Iran pipeline project since the country is strategically located in the pipeline grid for LNG.

LNG imports have transformed Pakistan since it was first introduced two years ago. However, this time Pakistan is set to experience major gas shortages in the coming winter which could become a key election issue next year.

A senior Pakistani government official speaking to Reuters put the chances of success for the project, set to be Pakistan's third and biggest by import capacity, at 10-20 percent due to the disagreements.

Exxon was pulling out because it had "issues with partners", particularly the developer, GEIL, one energy official told Reuters.

They are thinking to build a new terminal in Port Qasim," Pakistan's Maritime Affairs minister Hasil Bizenjo said.

Pakistan authorities are now actively looking for new partners with most players keen on developing Port Qasim. 

The new project would include a floating storage and regasification unit (FSRU), where LNG will be converted back into gas for feeding into the country's grid.

Pakistan plans to add its second LNG import terminal by the end of this year, but private companies have proposed building six more largely around Port Qasim.

Pakistan had begun work on the Iran pipeline in the mid-2000s which would have also included India and China but the US government put pressure on Pak government not to deal with Iran. 

The pipeline is now in various stages of completion with no set date for its inauguration.

Story highlights

Pakistan authorities are now actively looking for new partners with most players keen on developing Port Qasim.? ||LNG imports have transformed Pakistan since it was first introduced two years ago.