Industry Trend Analysis - LNG Projects Key To Consumption Growth - JUNE 2017

BMI View: The bulk of Pakistan ' s incremental gas needs will be met via LNG imports, as production declines at ag e ing fields and recent discoveries lack sufficient scale to reliably offset demand. The government has made alleviating domestic gas shortfall a priority, improving the outlook on several planned and proposed LNG projects in the country.

Pakistan's natural gas consumption is poised to increase from an estimated 48.2billion cubic metre (bcm) in 2017 to around 56.0bcm by 2021, amid intensifying state-led efforts to alleviate chronic gas shortages at home. Notably, government efforts will focus on adding more LNG import capacity and expanding domestic gas pipeline connectivity, particularly to more rural and remote areas, in order to boost gas supply availability and delivery to end-users.

The domestic pipeline infrastructure space could see a material upsurge in investment inflows in the coming quarters, especially in large gas-producing provinces such as Sindh, Khyber-Paktunkwa and Baluchistan, following Prime Minister Nawaz Sharif's April 2017 decision to lift the longstanding nationwide moratorium on new gas connections. Pakistan had banned new gas connections to commercial, industrial and residential sectors since 2009 amid concerns that domestic gas supplies were depleting too rapidly. However, gradual signs of rebounding risk appetite in the onshore exploration scene and improving access to LNG imports appear to have steered the drive to a reversal.

LNG Imports To See Consistent Growth
Pakistan - Natural Gas Consumption & Net LNG Exports
Negative implies imports. e/f = BMI estimate/forecast. Source: National Sources, JODI, BMI

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