KARACHI: US energy giant ExxonMobil has pulled out of a deal with Pakistani consortium Energas for the construction of a liquefied natural gas (LNG) import terminal near Karachi, officials of both business entities confirmed while talking to Arab News on Wednesday.
“This is part of our ongoing review to find further efficiencies and strengthen the company for the future,” ExxonMobil spokesperson Alvin Foo said in an email from Singapore. “The decision does not impact our Downstream and Chemical business in Pakistan, and future investment opportunities in Pakistan will be evaluated,” he added.
In 2018, ExxonMobil had signed an agreement with Energas to support the development of Pakistan’s third LNG import terminal. According to the document, the construction work had to be carried out at Port Qasim at an estimated cost of $150 million, and the facility had to be built to accommodate 750 million cubic feet per day (mmcfd) or about 5.6 million tons LNG per year.
At present, Pakistan has two LNG terminals that handle imported gas for domestic consumption. The combined capacity of these terminals is 1.2 billion cubic feet per day.
The Pakistani consortium has a combined balance sheet of $5.7 billion and an annual turnover of $3.2 billion, along with investments in power generation projects in the country with a capacity of 2,000 megawatts.
While acknowledging the technical support provided by ExxonMobil, Energas officials said the American company’s exit would not have a major impact since it had no equity stakes in the project. They added that all regulatory approvals and licenses had already been obtained and the construction of the terminal was likely to start within the next two months.
In May 2018, ExxonMobil acquired 25 percent stakes in offshore drilling in Pakistan at Kekra-1 near the Pakistan-Iran border. Other consortium partners were Government Holdings Private Limited, Pakistan Petroleum, Italian exploration giant ENI and the Oil and Gas Development Corporation (OGDC) of Pakistan. While it was initially said that the site had bigger reserves than those in Kuwait, the project was abandoned last year when the government announced that nothing had been found.
Although the ExxonMobil spokesperson did not comment on the impact of Kekra-1 drilling failure, he said that his company was looking at measures to reduce expenses arising out of market conditions and price reductions.
“ExxonMobil is evaluating all appropriate steps to significantly reduce capital and operating expenses in the near term as a result of market conditions and commodity price decreases,” Foo said.
US-based experts say ExxonMobil has slashed its budget after suffering financial losses amid the coronavirus pandemic.
“ExxonMobil has reduced its capital budget. They are in the shale gas business here and suffered substantial losses due to price decline,” Masood Abdali, an energy expert, told Arab News from Texas. “Also, their business was not going well globally.”
Abdali, who previously served as business development manager of Weatherford in Saudi Arabia and Bahrain, believes that Pakistan’s market is difficult since it is risky for foreign companies.
“Pakistan’s market is very difficult and the risk is very high. Therefore, the operating cost remains high for foreign companies,” he said.
ExxonMobil pulls out of deal to construct LNG terminal at Pakistan's Port Qasim
https://arab.news/rvvtz
ExxonMobil pulls out of deal to construct LNG terminal at Pakistan's Port Qasim
- The spokesperson of the US energy company says exit won’t impact its downstream and chemical business in the country
- ExxonMobil had signed an agreement with Energas in 2018 to support the development of Pakistan’s third LNG import terminal
Pakistan’s National Assembly speaker to attend Khaleda Zia’s funeral in Dhaka
- Ayaz Sadiq will convey Pakistan’s condolences to Zia’s family, interim government
- Visit comes amid warming ties between Islamabad and Dhaka after years of strain
ISLAMABAD: Pakistan’s National Assembly Speaker Sardar Ayaz Sadiq is due to travel to Dhaka on Wednesday to attend the funeral of Bangladesh’s former prime minister Khaleda Zia, a move that highlights a recent thaw in relations between the two South Asian countries after decades of unease.
Zia, Bangladesh’s first female prime minister and a key political figure for decades, died on Tuesday at the age of 80 after a prolonged illness, her Bangladesh Nationalist Party (BNP) said. Her death prompted messages of condolence from leaders across the region, including Pakistan’s prime minister.
“The Speaker of Pakistan’s National Assembly, Sardar Ayaz Sadiq, will depart for Dhaka, Bangladesh, on Wednesday,” Pakistan’s National Assembly said in a post on social media platform X on Tuesday. “The National Assembly Speaker will attend the funeral prayers of Bangladesh’s former prime minister, Begum Khaleda Zia.”
“The Speaker will also convey condolences to Khaleda Zia’s family on behalf of the government, parliament and the people of Pakistan,” it added. “Speaker Sardar Ayaz Sadiq will also meet senior officials of Bangladesh’s interim government.”
Sharif had earlier described Zia as a “committed friend of Pakistan,” praising her role in Bangladesh’s political life and expressing solidarity with the Bangladeshi people during what he called a difficult moment.
Zia, who served three terms as prime minister, led the BNP and remained a central figure in Bangladeshi politics despite years of ill health and imprisonment under the government of her longtime rival, Sheikh Hasina. She was released last year following Hasina’s ouster after a violent uprising.
Pakistan and Bangladesh were part of the same country until Bangladesh’s secession following a bloody civil war in 1971, an event that has long cast a shadow over bilateral ties. Relations remained largely strained for decades, shaped by historical grievances and political mistrust.
However, Islamabad enjoyed comparatively warmer ties with Dhaka during Zia’s tenure than under Hasina.
Engagement between Islamabad and Dhaka has increased since Hasina’s removal and the formation of an interim administration, with both sides signaling interest in improving political, diplomatic, economic and security ties.
