Country’s first LNG terminal set to start operations in March

Country’s first LNG terminal set to start operations in March

Pakistan’s first Liquefied Natural Gas (LNG) terminal has been completed by Engro Vopak Terminal Limited (EVTL) and the company has given go ahead to the government to start operations in the first week of March, 2015. According to petroleum ministry officials’, in the first phase Pakistan is going to strike a long-term LNG supply contract with Qatar at current commodity international rate, which is in the range of $7 to $8 per MMBTU.

The sources said that during Petroleum Minister Shahid Khaqan Abbasi’s recent visit, Qatar assured Pakistan of supplying sustainable LNG for 15 years at 13.5 percent of Brent (which is around $7 per MMBTU), and Pakistan presented two drafts of agreements – one for long-tem and the other medium-term.

“As yet both the countries have not agreed on LNG price but keeping in view the current international prices, it should be in the range of $7 to $8 per MMBTU. The Qatar government has assured Pakistan of supplying the required quantity of LNG. Pakistan has addressed all the concerns of the Qatari government and they are ready to supply LNG,” the officials stated.

Pakistan at present is facing serious gas crisis, as a result supply to many industries and other sectors has been suspended and to deal with the crisis, the government is going to begin LNG import within the next few years. The government wants to commence importing 400 Million Cubic Feet per Day (MMCFD) of LNG from Qatar on fast track basis for which a LNG terminal has reached its final stage at Port Qasim Karachi with a capacity to handle a maximum of 650 MMCFD of the commodity. The officials said that Malaysian LNG producer and supplier Petronas had also assured Pakistan of supplying 200 MMCFD of LNG per annum.

They added that during a recent visit, the senior management of Petronas showed great interest in supplying 1.5 million tons LNG per annum to Pakistan. Under the agreement, the government is required to arrange LNG imports and pick up to 250 mmcfd with effect from April 1, 2015, failing which they will have to pay the Engro LNG terminal operator $270,000 per day.

Recently a number of LNG producers approached the government and showed willingness to supply the commodity, including state-owned energy companies of Brunei Darussalam and China. According to the ministry officials, all these companies are interested in supplying the commodity on a government-to-government contract basis. According to the officials, PB Trading Sendirian Berhad, a wholly-owned subsidiary of Brunei National Petroleum Company, also known as Petroleum Brunei, a national oil company, and Petro China, one of China’s largest petroleum companies, have expressed interest in exporting LNG to Pakistan.

In addition to these, Pakistan would explore the possibility of importing LNG from countries like Australia, Nigeria, Indonesia, Algeria, Russia and Oman, which are exporting gas to many countries of the world. In another major project, the government has awarded a $3-billion Gwadar LNG pipeline and terminal contract to a Chinese company, which will serve as an alternative to the Iran-Pakistan (IP) gas pipeline project.

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