Petroleum ministry will now seek ECC’s nod for inking deal. PHOTO: AFP
ISLAMABAD: The board of directors of Pakistan LNG Terminals Limited (PLTL) gave approval on Tuesday for inking a liquefied natural gas (LNG) services agreement with the successful bidder for setting up the second LNG terminal in Karachi to handle gas imports.
“PLTL board of directors met to consider the award of contract and after detailed deliberation, it authorised the management to sign a services agreement with the successful bidder,” said a senior official aware of the development.
“Now, the Ministry of Petroleum and Natural Resources will send a summary to the Economic Coordination Committee (ECC) to seek its consent to signing the services agreement.”
Earlier in a meeting on May 6, the board had given the go-ahead to the financial bid submitted by Fauji Oil Terminal and Distribution Company (Fotco) along with Pakistan GasPort Limited, which had emerged as the lowest evaluated bidder.
The bidder had offered a levellised (service) charge of $0.4177 per million British thermal units (mmbtu) with a handling capacity for 600 million cubic feet per day (mmcfd). The terminal will be built in 11 months at Port Qasim.
The government has embarked on a drive to replace oil consumption in power plants with imported gas in order to improve efficiency and produce clean energy.
At present, the country is facing a shortfall of 2 billion cubic feet of gas per day (bcfd) with domestic natural gas production standing at 4 bcfd. Though demand has grown steadily, the local production has remained stagnant for the last 10 years.
Apart from LNG imports, the government is also working on gas pipelines like Turkmenistan, Afghanistan, Pakistan and India (Tapi) and Iran-Pakistan projects to make up for the shortfall. However, it finds LNG import as an immediate solution to the shortage.
The government has also planned to set up an LNG terminal at Gwadar Port with 600mmcfd capacity in association with China.
According to the senior official, the new LNG terminal at Port Qasim will provide gas for 3,600-megawatt LNG-based power plants - each having a capacity of 1,200MW - being set up in Punjab. These plants will help to overcome energy shortages in the province.
Published in The Express Tribune, June 8th, 2016.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.
COMMENTS
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ