KARACHI: Pakistan’s Energas is all set to start construction of Pakistan’s third Liquefied Natural Gas (LNG) terminal at a cost of $180 million after securing almost all regulatory approvals, the company’s chief executive officer said.
Energas was formed in 2017 as a buyers’ consortium to set up the country’s first and largest private LNG terminal. The project intends to provide LNG for associated businesses through a floating storage and regasification unit (FSRU).
“We are ready to start construction activity at the site for LNG terminal soon,” Energas CEO Anser Ahmed Khan said in an interview with Arab News this week.
Energas was granted a license to undertake regulated activity related to the sale of natural gas and regasified liquefied natural gas (RLNG) in Pakistan on January 12, 2021. The last steps now include getting an LNG terminal construction development license from the Oil and Gas Regulatory Authority and signing gas transportation agreements with two gas utilities, the Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipeline Limited (SNGPL).
“We hope that the OGRA license will be granted by next month,” CEO Khan said.
With Pakistan becoming one of the fastest growing LNG markets since it first started importing in 2015, with imports rising to 8.4 million tons in 2019 from 6.8 million mt in 2018, analysts say there is an urgent need to speed up import capacity expansions, which have been planned to absorb incremental inflows.
S&P Global Platts Analytics forecasts LNG imports to rise to 9.3 million mt in 2021, if Pakistan can bring in another floating storage and regasification unit relatively quickly. Imports are expected to exceed 17 million mt by 2025.
The Energas LNG terminal will be constructed at Port Qasim in Karachi, with a capacity of 750 million cubic feet per day (mmcfd) to 1000 mmcfd, and is designed to accommodate a floating storage and regasification unit of approximately 170,000m3.
“The construction of the terminal would take 12 to 15 months to complete,” Khan, who previously worked as vice president for LNG at EDF Trading London, one of the largest utilities in the world, said, adding: “We initially plan to import two cargos per month.”
Energy-deficit Pakistan has only two LNG terminals operating at present, with a combined annual capacity of 1380 mmcfd. The capacity of both terminals has been contracted by the government. A fourth terminal, Tabeer Energy, is expected to start operations in the first quarter of 2023.
The country is currently suffering severe gas shortage, forcing many industrial units and power plants to look for alternates or halt operational activities.
“When we will go online with commercial activities, the efficiency of the country in terms of capacity would increase by 50 percent and the LNG value chain will get the required breathing space as it is currently on fragile footing due to limited storage and maximum capacity utilization,” Energas CEO said.
“We will directly buy LNG from producers and supply to our buyers’ consortium, comprising some of the largest business groups,” he said, adding: “When you have a consortium of customers running the chain, the risks associated with long-term LNG purchases are well spread and better managed.”
Natural Gas constitutes around 50% of Pakistan’s primary energy mix. The local production of gas is stagnant at 4 bmcfd for almost 10 years as compared to the constrained demand of 6 bmcfd and unconstrained demand of 8 bmcfd.
The Energas chief estimated that the demand for gas would continue to grow by 100-200 mmcfd per year which he said could only be “managed with greater involvement of the private sector.”
Spot LNG prices on Wednesday surged to a record high of $32.50 per mmbtu, according to S&P Global Platts, the price agency which issues Japan-Korea-Marker (JKM), a reference point used for spot deals in the region.
Last week Dubai’s state-owned Emirates National Oil Company Limited (ENOC) declined to deliver a liquified natural gas shipment to Pakistan for the end of February amid rising prices in the international market, as gas shortages continued to soar nationwide.
Energas all set to start construction of $180 mln Pakistani LNG terminal — CEO
https://arab.news/md8rh
Energas all set to start construction of $180 mln Pakistani LNG terminal — CEO
- Energas was formed in 2017 to set up Pakistan’s first and largest private LNG terminal, will provide gas through a floating storage and regasification unit
- Company now awaiting LNG terminal construction license from OGRA and gas transportation agreements with two utilities to kick off construction work
World Bank approves $700 million for Pakistan’s economic stability
- Of this, $600 million will go for federal programs and $100 million will support a provincial program in Sindh
- The results-based design ensures that resources are only disbursed once program objectives are achieved
ISLAMABAD: The World Bank has approved $700 million in financing for Pakistan under a multi-year initiative aimed at supporting the country’s macroeconomic stability and service delivery, the bank said on Friday.
The funds will be released under the bank’s Public Resources for Inclusive Development — Multiphase Programmatic Approach (PRID-MPA) that could provide up to $1.35 billion in total financing, according to the lender.
Of this amount, $600 million will go for federal programs and $100 million will support a provincial program in the southern Sindh province. The results-based design ensures that resources are only disbursed once program objectives are achieved.
“Pakistan’s path to inclusive, sustainable growth requires mobilizing more domestic resources and ensuring they are used efficiently and transparently to deliver results for people,” World Bank country director Bolormaa Amgaabazar said in a statement.
“Through this MPA, we are working with the Federal and Sindh governments to deliver tangible impacts— more predictable funding for schools and clinics, fairer tax systems, and stronger data for decision‑making— while safeguarding priority social and climate investments and strengthening public trust.”
The approval follows a $47.9 million World Bank grant in August to improve primary education in Pakistan’s most populous Punjab province.
In November, an IMF-World Bank report, uploaded by Pakistan’s finance ministry, said Pakistan’s fragmented regulation, opaque budgeting and political capture are curbing investment and weakening revenue.
Regional tensions may surface over international financing for Pakistan. In May, Reuters reported that India would oppose World Bank funding for Pakistan, citing a senior government source in New Delhi.
“Strengthening Pakistan’s fiscal foundations is essential to restoring macroeconomic stability, delivering results and strengthening institutions,” said Tobias Akhtar Haque, Lead Country Economist for the World Bank in Pakistan.
“Through the PRID‑MPA, we are launching a coherent nationwide approach to support reforms that expand fiscal space, bolster investments in human capital and climate resilience, and strengthen revenue administration, budget execution, and statistical systems. These reforms will ensure that resources reach the frontline and deliver better outcomes for people across Pakistan with greater efficiency and accountability.”
In Sindh, the program is expected to increase provincial revenues, enhance the speed and transparency of payments, and broaden the use of data to guide provincial decision making. The program will directly support the increase of public resources for inclusive development, including more equitable and responsive financing for primary health care facilities and more funding for schools.
