Shell, Exxon Mobil among groups to build five LNG terminals

Petroleum minister confirms the terminals will be operational within two to three years

ISLAMABAD: Pakistan has approved the construction of five liquefied natural gas (LNG) terminals by groups that include Exxon Mobil Corp and Royal Dutch Shell, aiming to triple imports and ease the country's chronic gas shortage, Pakistan's oil minister said on Friday.

The five terminals could be in operation within two to three years, Minister of power and petroleum Omar Ayub Khan said in an interview.

Pakistan is chronically short of gas for power production and to supply manufacturers such as fertilizer makers, hobbling the country's economy.

"It will make a significant dent in the gas shortage," Khan said.

The groups Pakistan selected to build terminals are: Tabeer Energy, a unit of Mitsubishi Corp; Exxon and Energas; Trafigura Group and Pakistan GasPort; Shell and Engro Corp ; and Gunvor Group and Fatima.

The identities of the five groups were reported earlier by Bloomberg.

At present, the second LNG terminal at Port Qasim has handling capacity of 750 million cubic feet per day (mmcfd), of which the government utilises 600 mmcfd.

The remaining is lying idle and has not been utilised. Third-party access rules are already in place and in line with those the Oil and Gas Regulatory Authority (Ogra) has allowed gas marketing by the private sector. The private sector will utilise the idle capacity of the second LNG terminal.

The government has been paying millions of dollars in capacity charges to the LNG terminal operators due to its failure to utilise the entire dedicated capacity.

LNG consumers have already paid $45 million in 2018 because of the unutilised capacity of LNG terminals and estimates suggest they will again bear an extra cost of $40 million in the ongoing year if the full terminal capacity is not utilised.