Pakistan Flogging Unloved Fuel Oil as It Shifts to Cleaner LNG

(Bloomberg) -- Pakistan’s drive to tackle its polluted skies has left it with a problem: It has more dirty fuel oil than it wants. Their solution? Swap it with shipments of cleaner liquefied natural gas.

The top oil marketing firm in South Asia’s second-largest economy, Pakistan State Oil Co., is exploring whether it can take delivery of LNG cargoes in return for supplying the fuel abroad, according to people with knowledge of the matter. The government controlled company has about 1 million tons of the crude residue stockpiled, the people said, and is also trying to  sell some of the cargoes.

Pakistan is joining the ranks of China and India in efforts to combat deadly smog from choking their cities while meeting burgeoning demand for cheap energy. It plans to add new gas and coal-fired power plants before elections in 2018 and switch off oil-based generation by 2019, Prime Minister  Shahid Khaqan Abbasi said earlier this year. That’ll drive the country to export a record amount of dirty fuel, also known as furnace oil, this fiscal year, according to Muhammad Saad Ali, research head at Intermarket Securities Ltd.

“Pakistan has an oil glut with new gas-fired power plants starting and demand dropping in the winter season,” Ali said on the phone from Karachi. “They need to get rid of that first.”

To contact the reporters on this story: Alfred Cang in Singapore at; Faseeh Mangi in Karachi at To contact the editors responsible for this story: Pratish Narayanan at Anna Kitanaka, Ovais Subhani.


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