The decision of the US energy company is seen as one of its ongoing cost-cutting measures taken up across its global operations
ExxonMobil global headquarters in Irving, Texas. (Credit: ExxonMobil/Wikipedia.org)
ExxonMobil has reportedly pulled out from a partnership with Pakistani consortium Energas that was formed to establish a liquefied natural gas import terminal (LNG project) in the Asian country.
The US company had signed a heads of agreement with Energas in 2018 to support what would become the third LNG import terminal in Pakistan.
ExxonMobil’s decision to quit the LNG project is seen as part of its plans to reduce its capital and operating expenses.
A company spokesperson was quoted by The Express Tribune, as saying: “ExxonMobil is evaluating all appropriate steps to significantly reduce capital and operating expenses in the near term as a result of market conditions and commodity price decreases,”
“This is part of our ongoing review to find further efficiencies and strengthen the company for the future.”
The spokesperson said that the decision will not affect the company’s downstream and chemical activities in Pakistan, while future investment opportunities in the country will be assessed.
The US energy company had also inked a cooperation agreement with Universal Gas Distribution to help in stimulating the compressed natural gas (CNG) sector and supply LNG supply to Pakistan.
Currently, Pakistan has two LNG terminals with a combined capacity of 1.3 billion cubic feet per day (bcfd) that are handling imports to cope up with domestic needs, said the publication.
In the coming years, Pakistan would require more LNG projects for importing three billion cubic feet of gas per day, as per government estimates.
Efforts of ExxonMobil in reducing its overall costs
ExxonMobil’s move to quit the LNG project in Pakistan follows the company’s third straight quarterly loss in 2020, which has forced it to take up deeper cost cuts and a potential $30bn writedown to its North American natural gas assets.
The company is set to trim its global workforce by 15% over the coming two years, which is an estimated 14,000 job cuts.
In Texas, where the company is headquartered, there will be confirmed job cuts of 1,900 roles. Across Europe, the US energy company will lay off up to 1,600 jobs by the end of next year.