State-owned Pakistan State Oil is likely to skip fuel oil imports for delivery in November as the country's power generation sector continues its shift to LNG, a company source said this week.
PSO has bought just 65,000 mt of 180 CST high sulfur fuel oil with maximum sulfur content of 3.5% for October delivery to Port Qasim, and did not purchase any low sulfur fuel oil for the month.
In comparison, the company had skipped HSFO and LSFO imports for September while for November 2017, it bought 195,000 mt of 125 CST HSFO and 110,000 mt of 120 CST LSFO with maximum 0.95% sulfur.
Pakistan's increasing use of LNG for power generation at the expense of oil has resulted in PSO cutting fuel oil imports drastically this year, even during the peak summer demand season of May-September.
PSO has bought 755,000 mt of fuel oil for May-September delivery, down 68.9% from 2.43 million mt in the same period last year, S&P Global Platts calculations showed.
Of this, 695,000 mt comprised HSFO, down 69.3% from a year earlier, and LSFO made up the other 60,000 mt, down 63.6% year on year.
PSO is Pakistan's main fuel oil importer, and sells the fuel oil to domestic power companies.
Overall, Pakistan imported 1.47 million mt of fuel oil over January-July, down 59.7% from a year ago, latest data from Pakistan's Oil Companies Advisory Council showed.
Pakistan imported 4.9 million mt of LNG in 2017, data from S&P Global Platts Analytics showed. This was up from 3.4 million mt and 1 million mt in 2016 and 2015, respectively.
The country's LNG imports are expected to grow exponentially, with more terminals ready to start operations, while Pakistan LNG estimated unconstrained demand to hit 30 million mt/year, or 4 Bcf/day of gas equivalent, by 2022, which is half of the country's total gas demand projection of 8 Bcf/d for that year. Recently, Pakistan LNG issued a tender to buy five LNG cargoes of 140,000 cm each for delivery over September-October, according to the company website.
