Pakistan Emerges from Eight-Year CNG Cylinder and Kits Ban

| Pakistan: Islamabad

CNG Station (Image Pakistan State Oil)In February 2012, the All Pakistan CNG Association (APCNGA) demanded the government lift its ban on the importation of CNG kits and cylinders and withdraw the import duty on CNG spare-parts, imposed when the country was struggling to secure gas supply. Finally, at the end of May this year, that ban has been lifted by Pakistan’s Economic Coordination Committee (ECC).

The decision of the ECC goes beyond overturning the eight-year ban by also reducing custom duties on imported kits and cylinders. The New International (news service) says the restoration of CNG systems supply and the lower duty appear to be due to the rising price of oil placing new demands on the economy and the government’s desire to promote natural gas as an alternative fuel.

When the ban was imposed, APCNGA warned the government that limiting the supply of natural gas fuel system components would result in trade moving to the back streets, significantly reducing safety by creating and using sub-standard kits and limiting available knowledge, and indeed this is also a motive for the EEC’s ban cessation.

Addressing Gas Supply

Gas supply remains a problem for Pakistan, where the NGV market must compete for supply with power generation, fertiliser manufacture and industrial application, not a problem it faces alone as natural gas gains ground around the world as a cleaner, more affordable alternative to gasoline and diesel. According to NGV Global’s statistics there are now more than 25 million vehicles in use.

The country is working hard to match supply to demand. Pakistan news sources report Turkmenistan plans to secure within a few months all the necessary funding to complete the construction of an $8 billion natural gas pipeline to Afghanistan, Pakistan and India (known as the TAPI project), the project’s chief executive reportedly said last week. Under the project, a 56-inch diameter 1,680km pipeline, having capacity to flow 3.2 billion cubic feet per day (bcfd) gas, would be laid from Turkmenistan through Afghanistan and Pakistan up to the Pak-India border, which is scheduled for completion in the year 2020.

Pakistan LNG Limited (PLL), mandated by the Government of Pakistan (GoP) to carry out the business of buying, importing, storing LNG, distributing, transporting, metering and selling of natural gas, has been inviting bids for bulk shipped LNG. Its goal is to raise  imported gases as a percentage of total gas in the system from 10% to over 60%.

Pakistan’s natural gas legacy arising from earlier domestic supply is more than 120,000 kms of natural gas pipeline. The addition of LNG infrastructure has been critical to strengthening the economy and Pakistan LNG Terminals Limited (PLTL) has been mandated by the GoP to manage the implementation of storage and regasification for the country. Also a state-owned enterprise, it is implementing and procuring the entire LNG regasification capacities from existing as well as new LNG terminals at Port Qasim, Gwadar and Sonmiani. The country’s second liquefied natural gas (LNG) import and regasification terminal, located at Port Qasim, built by a Chinese consortium, started receiving commercial LNG cargoes in December last year.

News sources have put the number of natural gas vehicles in Pakistan, consisting mainly of light vehicles, at somewhere between three and four million. The return of stability to fuel supply and a positive policy setting will do much to restore confidence and safety standards, leading to further growth in one of the world’s major NGV markets. That in turn will help address air pollution, particularly in norther Pakistan where the Punjab Information Technology Board says average air pollution in big cities (e.g. Lahore, Islamabad, Faisalabad, etc.) is about 4 times higher than the World Health Organization (WHO) limits.

Sources include Government of Pakistan, WHO, PLL, PLTL and The New International.

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