ECC may allow Bahria Foundation to set up LNG terminal

Country needs one more gas terminal in view of growing demand

Zafar Bhutta March 26, 2019

ISLAMABAD: The government may withdraw a plan that permitted the Ministry of Maritime Affairs to set up a liquefied natural gas (LNG) terminal and instead allow the Bahria Foundation to set up the terminal in Karachi.

Bahria Foundation was working on building a new LNG terminal at Sonmiani connected to the Hub-Nawabshah gas pipeline project without any public funding. Meanwhile, the Economic Coordination Committee (ECC) of the cabinet allowed the Ministry of Maritime Affairs to work out a plan for setting up one more LNG terminal.

Following the development, according to officials, the Bahria Foundation took up the matter with Finance Minister Asad Umar, arguing that it was already setting up an LNG terminal at Sonmiani, which would be named Bahria Foundation LNG Terminal project.

“Now, the new development will be presented to the ECC to press ahead with the plan of setting up one more LNG terminal,” an official said, adding that the project of Bahria Foundation was more viable and therefore, it was likely that the ECC may withdraw the earlier plan that allowed the maritime affairs ministry to work on setting up an LNG terminal.

Already, two LNG terminals are running at Port Qasim.

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The Ministry of Maritime Affairs had earlier recommended the ECC that the existing LNG terminals may be excluded from the purview of Pakistan LNG Terminals Limited (PLTL), which is working under the Petroleum Division. The Ministry of Maritime Affairs would perform the function in consultation with the port authorities, it said.

The recent decision of the ECC to engage the Ministry of Maritime Affairs indicates that the government has made PLTL dysfunctional, which was established during the tenure of previous Pakistan Muslim League-Nawaz (PML-N) government as a regulator of LNG terminals.

“The task has now been shifted to the Ministry of Maritime Affairs,” the official said.

The ministry had also earlier suggested that the LNG Policy 2011 should be amended to include no-objection certificate from the Sindh Environmental Protection Agency (Sepa), a quantitative risk assessment (QRA) study and a navigational simulation study of a suitable location allotted by the ministry and port authorities within the specified LNG zone covering security, safety, environmental and traffic aspects.

Officials said the government was of the view that the country required one more LNG terminal in view of growing demand for gas consumption. Gas production in Pakistan has not increased over the past decades as no major discovery could be made. The government is mainly depending on imported gas to meet domestic requirements.

The Ministry of Maritime Affairs had been tasked with exploring the possibility of setting up the LNG terminal. However, the Bahria Foundation has now raised the issue that it is already working on an LNG terminal, therefore, the ministry should not engage in such work.

Published in The Express Tribune, March 26th, 2019.

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