Import facility: ‘LNG terminal to be ready by Jan 26’

ETPL CEO says infrastructure works have been completed.


Our Correspondent October 22, 2014

KARACHI: Engro Elengy Terminal Private Limited (ETPL) said on Wednesday that it will be ready to receive liquefied natural gas (LNG) consignments at Karachi’s Port Qasim by January 26, 2015.

Vital works related to LNG infrastructure including the 14.5-metre deep dredging of the channel, erecting pillars for the jetty, construction of pipelines and basic engineering has been completed, Engro ETPL CEO Sheikh Imran ul Haque, told journalists during a briefing on the project.

ETPL has hired a floating storage and regasification unit (FSRU) – a large ship with onboard liquid-to-gas conversion facility and storage tanks – that will be docked at a new jetty being built at the port.

The FSRU has capacity to handle an average of 600 million cubic feet per day (mmcfd) of gas. Pakistan’s government will use 200 mmcfd of the capacity to import LNG by itself for the first year and then expand the import volume to 400 mmcfd.

At least four private ‘parties’ are also in talks with ETPL to use its spare capacity to import gas, Haque said. “Independent power producers (IPP) and CNG station owners are among those who have approached us.”

Doubts remain if the government will be able to confirm its part of supplies by the time the terminal is ready. But Haque insisted that the government has already issued tender to import LNG through Pakistan State Oil (PSO).

About financing of the $145 million project, he said the terminal was being built even without financial close. “This is quite an achievement for us. We have all the money we need and it was arranged from subordinate loans and through our equity.”

Part of the financing will come from International Finance Corporation (IFC) and Asian Development Bank (ADB).  Engro’s investment is not protected by any sovereign guarantee, Haque said. “There is only the take-or-pay clause, which means we have to be paid for 200 mmcfd of the terminal’s capacity.” ETPL has been allowed a tariff of 66 cents per million British thermal unit for the terminal.

The Sui Southern Gas Company, which will receive the LNG supplies into its pipeline network, has issued a standby letter of credit to the company, covering six months of payment for the tariff.

“This is only for six months and still it doesn’t guarantee what will happen after that,” said the CEO. “This is still nothing compared to the kind of protection IPPs get.”

Pakistan produces around 4,000 mmcfd of gas against a demand of over 6,000 mmcfd. The LNG project is expected to add around 10% to current supplies. Unlike on-shore LNG terminal, which costs much more and takes longer to be built, Engro’s design includes a jetty to be constructed near its existing liquid terminal at Port Qasim.

The FSRU being hired from US-based Excelerate Energy will be permanently berthed at the jetty and supplied by LNG tankers.

Work began on the LNG import project in 2005 but every attempt ended up with enquiries over transparency issues. Industry officials say that Pakistan must immediately start its import if it intends to maintain the current GDP growth rate.

Published in The Express Tribune, October 23rd, 2014.

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COMMENTS (2)

khalil | 9 years ago | Reply

End result aftr 2005 is expected 26 jnury 2015

Aisha | 9 years ago | Reply

Well Done PML-N !

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