Pakistan Plans $1 Billion Investment to Overhaul LPG Import Infrastructure

Pakistan is planning an estimated $1 billion investment over the next three to five years to expand its liquefied petroleum gas (LPG) import infrastructure, according to proposals submitted to the federal cabinet as part of a broader overhaul of the sector. The plan aims to resolve long-standing storage and port constraints, allow larger shipments and strengthen the country's ability to satisfy rising demand through additional terminals, storage facilities and transport capacity.

A government summary identifies significant weaknesses in the current setup. The two terminals at Port Qasim each hold storage capacity of roughly 6,500 metric tons and can accept vessels of no more than 10,000 deadweight tons (DWT), compared with international norms of 30,000 to 50,000 DWT. The country also lacks refrigerated storage and an inter-terminal pipeline, limiting its ability to receive larger cargoes and gain economies of scale.

To address these gaps, the proposed guidelines call for allocating land and berth facilities at Port Qasim for a 40,000-metric-ton LPG terminal, with a first phase providing 10,000 to 12,000 metric tons of storage capacity on land with access to the SSGC jetty. Because the existing 10-metre draft at the SSGC LPG jetty restricts vessel size, the government proposes a feasibility study comparing two options: dredging the Port Qasim approach channel to accommodate vessels of about 25,000 DWT, or building a jetty capable of receiving very large gas carriers alongside a refrigerated terminal.

In the interim, state-owned entities may be granted access to existing terminals and storage facilities. Pakistan State Oil (PSO) and Shell LPG Ltd (SLL) could also be authorised to arrange long-term and government-to-government supply agreements, similar to the KPC arrangement for high-speed diesel, to act as a national import backstop. State-owned entities may additionally develop or contract extra storage and handling capacity.

The government estimates that meeting demand through FY2035-36 will require approximately $1 billion in investment over the next three to five years, covering additional terminals, storage facilities, cylinders, filling plants and transportation capacity. The proposals now await cabinet approval, and if cleared, they would mark one of the sector's most substantial infrastructure commitments in years.

The stakes are high for consumers and industry alike. LPG serves millions of households and businesses, particularly in areas beyond the gas grid, and improved import capacity could ease periodic supply shortages and price volatility. Cabinet approval of the summary would set in motion feasibility work and phased development at Port Qasim.