International investors have responded poorly to bids invited by Pakistan for providing services for import of up to 400 million cubic feet of liquefied natural gas per day (mmcfd), apparently in the face of cancellation of LNG import tenders in the past.
The bids were called by Inter State Gas Systems (ISGS) – a state-run company set up to deal with gas import projects – for providing complete services for delivery of a minimum of 200 mmcfd of LNG and maximum of 400 mmcfd to Sui Southern Gas Company’s grid in the vicinity of Port Qasim. Contract will be given for up to 10 years.
“Owing to cancellation of tenders several times, now international parties do not seem interested as only two domestic investors – Pakistan Gas Port and Engro Vopak Terminal Limited (EVTL) – have participated in the latest tender,” an official told The Express Tribune.
Financial bids submitted by these two interested bidders are expected to be opened this week. A senior ISGS official confirmed that two parties have given offers in response to the tender.
According to officials, ISGS held a meeting with the two bidders on October 23 to clarify certain things pertaining to the bids. “This is the fourth LNG tender that the government has floated for import,” the official said.
ISGS is working on a fast-track import of LNG and the bids are now being technically evaluated. The government intends to set up a terminal within 11 months.
EVTL has its own terminal and will add a jetty to handle LNG imports whereas Pakistan Gas Port will use the jetty of Fauji Oil Terminal and Distribution Company (Fotco).
In another LNG terminal project, Sui Southern Gas Company will set up an LNG handling facility called LNG retrofit facility at its existing liquefied petroleum gas terminal in Karachi. Under this project, import of 200 to 500 mmcfd of LNG will be handled and the project developer will charge a tolling fee.
Only one company, 4Gas Asia, has qualified for the project. SSGC’s board of directors has approved the award of contract to the company subject to approval of the Public Procurement Regulatory Authority (PPRA) as the company has sought extension in the bid validity period.
The SSGC board has sent its decision to the Ministry of Petroleum and Natural Resources.
Petroleum Secretary Abid Saeed told The Express Tribune that they were reviewing the SSGC’s decision after which the project would be sent to the Economic Coordination Committee for approval.
The Port Qasim Authority has not yet framed rules and regulations to handle LNG imports.
Published in The Express Tribune, October 29th, 2013.
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