Engro Vopak Terminal Limited (EVTL) has pressed the government to extend the lease of land for a liquefied petroleum gas (LPG) and liquid chemical terminal at Port Qasim to enable it to continue operations.
The government had allocated a piece of land to EVTL at Port Qasim in 1995 and its lease is going to expire in 2026. Now, EVTL is urging the government to extend the lease. However, the Ministry of Maritime Affairs has refused to extend the lease and plans to float a tender for a fresh lease.
EVTL claims it has spent $100 million and intends to continue investing in the project if the government extends the lease agreement.
Interestingly, the extension in lease is not part of the agreement; therefore the maritime affairs ministry is reluctant to endorse it.
Sources said that the Port Qasim Authority (PQA) could not extend the lease of land and it would have to float a tender under the Public Procurement Regulatory Authority (PPRA) rules.
Besides the LPG and liquid chemical terminal, a liquefied natural gas (LNG) pipeline also passes through this land that connects an LNG terminal owned by Engro with Sui Southern Gas Company's network.
Sources said that the matter was taken up in a recent meeting of the Special Investment Facilitation Council (SIFC). The SIFC had set a deadline for the Petroleum Division to complete negotiations with EVTL.
The PQA informed the government about the initiation of another round of negotiations with EVTL by signing the second Supplemental Implementation Agreement on January 15, 2025.
It emphasised that a third-party business valuation of the terminal was necessary, which required additional time. The PQA was of the view that the deadline of January 31, 2025 could not be met due to the extensive due diligence required in the process.
It requested an extension in the deadline to assist in the independent valuation of assets. The government granted extension of another 30 days (until March 2) for finalising ongoing negotiations with EVTL through signing the third Supplemental Agreement. It decided that the Finance Division would facilitate the PQA by providing services for the independent evaluation of assets.
The EVTL terminal for bulk liquid chemicals and LPG is part of Vopak's global network of 78 terminals across 23 countries with total capacity of 36.2 million cubic metres. A joint venture between Royal Vopak (the Netherlands) and Engro Corporation, it has provided storage and terminal services since 1997. Engro Vopak handles over 50% of Pakistan's LPG marine imports and supports major chemical industries by delivering key products like phosphoric acid, paraxylene and ethylene. Its LPG storage capacity had been expanded to 6,700 MT in 2012, with total storage now at 82,400 cubic metres.
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