Pakistan's second LNG terminal to be built at Karachi's Port Qasim
Emerges as the lowest bidder that will receive 600mmcfd of gas
PHOTO: AFP
ISLAMABAD:
A consortium led by Pakistan GasPort Limited, a company of the Associated Group, has emerged as the lowest bidder in the tenders invited from investors interested in setting up the country’s second liquefied natural gas (LNG) terminal for handling imports.
This was revealed in a tender evaluation report made public by government-owned Pakistan LNG Terminals Limited on Friday after a meeting of its board of directors.
The financial bid evaluation report, issued in line with Rule 35 of the Public Procurement Rules 2004, is available on the website of Pakistan LNG Terminals.
Gas-based power production rises, but it comes at higher cost
In response to the tender, two consortia - one led by Pakistan GasPort Limited and the other by Akbar Associates - had submitted offers on February 26. The former qualified in the technical evaluation round.
Pakistan GasPort-led consortium included Fauji Oil Terminal and Distribution Company (Fotco). According to the evaluation report, the consortium has offered a levelised (service) charge of $0.4177 per million British thermal units (mmbtu) for handling a capacity of 600 million cubic feet per day (mmcfd). This service fee is lower than that being received by the first terminal operator.
The second terminal will also be built at Port Qasim and it will take 11 months. It will provide LNG to new power plants of 3,600-megawatt capacity being set up in Punjab. The National Accountability Bureau and the Public Procurement Regulatory Authority have already given the go-ahead to Pakistan LNG Terminals for the award of terminal contract in accordance with the law.
“Pakistan will make annual savings of $1.5 billion by consuming LNG in power plants compared to plants run on expensive oil,” a senior government official said, pointing out that oil-based plants had 38% efficiency level whereas gas-powered plants had over 50% efficiency.
According to the official, Pakistan will not only be able to churn out clean energy with the help of LNG imports, but it will also be increasing power production to meet growing needs. The first LNG terminal had already been set up by Engro Elengy Terminal Limited at Port Qasim that started receiving supplies in March last year.
Engro is receiving $0.6601 per mmbtu as the levelised (service) charge for handling a capacity of 400mmcfd.
Engro’s terminal has so far re-gasified and pumped over 77 billion cubic feet of gas into the national gas distribution network by converting approximately 1.7 million tons of imported LNG.
Two LNG plants to supply power by end of 2017
A total of 29 LNG shipments have so far berthed at the port in the last 13 months and all the imported LNG has been re-gasified and pumped into the SSGC system for further distribution.
After the continuous supply of LNG into the system, gas-based power plants are getting 250mmcfd, fertiliser plants 80mmcfd, CNG pumps 35mmcfd and textile industry is getting 35mmcfd.
Pakistan is currently receiving LNG supplies from two sources - Qatar and Gunvor. Every month three ships arrive from Qatar carrying an average of 300mmcfd, and one ship is sent by Gunvor bringing an average of 100mmcfd. They are delivering LNG at a rate of 13.37% of Brent crude price.
According to the government official, gas utilities - Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipelines Limited (SNGPL) - have the capacity to distribute 400mmcfd of re-gasified LNG though their pipeline networks.
In an effort to gradually enhance their capacity, these companies are laying 42-inch pipelines to be able to handle 1,200mmcfd by December 2017.
Published in The Express Tribune, May 8th, 2016.
A consortium led by Pakistan GasPort Limited, a company of the Associated Group, has emerged as the lowest bidder in the tenders invited from investors interested in setting up the country’s second liquefied natural gas (LNG) terminal for handling imports.
This was revealed in a tender evaluation report made public by government-owned Pakistan LNG Terminals Limited on Friday after a meeting of its board of directors.
The financial bid evaluation report, issued in line with Rule 35 of the Public Procurement Rules 2004, is available on the website of Pakistan LNG Terminals.
Gas-based power production rises, but it comes at higher cost
In response to the tender, two consortia - one led by Pakistan GasPort Limited and the other by Akbar Associates - had submitted offers on February 26. The former qualified in the technical evaluation round.
Pakistan GasPort-led consortium included Fauji Oil Terminal and Distribution Company (Fotco). According to the evaluation report, the consortium has offered a levelised (service) charge of $0.4177 per million British thermal units (mmbtu) for handling a capacity of 600 million cubic feet per day (mmcfd). This service fee is lower than that being received by the first terminal operator.
The second terminal will also be built at Port Qasim and it will take 11 months. It will provide LNG to new power plants of 3,600-megawatt capacity being set up in Punjab. The National Accountability Bureau and the Public Procurement Regulatory Authority have already given the go-ahead to Pakistan LNG Terminals for the award of terminal contract in accordance with the law.
“Pakistan will make annual savings of $1.5 billion by consuming LNG in power plants compared to plants run on expensive oil,” a senior government official said, pointing out that oil-based plants had 38% efficiency level whereas gas-powered plants had over 50% efficiency.
According to the official, Pakistan will not only be able to churn out clean energy with the help of LNG imports, but it will also be increasing power production to meet growing needs. The first LNG terminal had already been set up by Engro Elengy Terminal Limited at Port Qasim that started receiving supplies in March last year.
Engro is receiving $0.6601 per mmbtu as the levelised (service) charge for handling a capacity of 400mmcfd.
Engro’s terminal has so far re-gasified and pumped over 77 billion cubic feet of gas into the national gas distribution network by converting approximately 1.7 million tons of imported LNG.
Two LNG plants to supply power by end of 2017
A total of 29 LNG shipments have so far berthed at the port in the last 13 months and all the imported LNG has been re-gasified and pumped into the SSGC system for further distribution.
After the continuous supply of LNG into the system, gas-based power plants are getting 250mmcfd, fertiliser plants 80mmcfd, CNG pumps 35mmcfd and textile industry is getting 35mmcfd.
Pakistan is currently receiving LNG supplies from two sources - Qatar and Gunvor. Every month three ships arrive from Qatar carrying an average of 300mmcfd, and one ship is sent by Gunvor bringing an average of 100mmcfd. They are delivering LNG at a rate of 13.37% of Brent crude price.
According to the government official, gas utilities - Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipelines Limited (SNGPL) - have the capacity to distribute 400mmcfd of re-gasified LNG though their pipeline networks.
In an effort to gradually enhance their capacity, these companies are laying 42-inch pipelines to be able to handle 1,200mmcfd by December 2017.
Published in The Express Tribune, May 8th, 2016.