SIFC direction: Ministry to remove hurdles for Qatari investment in LNG terminal

ISLAMABAD: In a new development, the Special Investment Facilitation Council (SIFC) has swung into action over impediments in the way of a $200 million Qatari investment in an LNG terminal and directed the Petroleum Division to do away with all the hurdles, top official sources told The News.

“Energas plans to establish the LNG terminal with Regas capacity of 750-1,000 MMCFD having a shareholding of 49pc of Qatar Gas and 51pc of Energas. To be erected on BtB model, the investment from Qatar has been stalled for the last five years due to bureaucratic red-tapism.”

Qatar has time and again raised the issue at the highest level with the PTI and PDM governments but no progress could be made on OGRA network code, tax holiday, TPA exemption, SNGPL GTA (gas transmission agreement). “This time SIFC has taken up this issue with the intervention of top military leadership and directed the mandarins of the Petroleum Division to resolve all the issues and report back so that the investment from Qatar could be ensured.”

Keeping in view the SIFC directives, the secretary Petroleum Division is personally looking into the matter and is trying to resolve all the issues, a senior official of the Petroleum Division confirmed to The News.

The Energas Terminal, which is to be operated without any government guarantee on RLNG takeoff, will have the capacity to re-gasify up to 1,000 million cubic feet per day (mmcfd) of LNG.

But Qatar is not the only one. Pakistan Port Gas Limited’s LNG Terminal-2 and Tabeer LNG Terminal owned by Japan’s Mitsubishi are also in the pipeline for a long time. Meant to become operational in 2021 on a BtB model, they are still lying dormant because of red tape.

Energy Minister Muhammad Ali earlier told The News: “The ministry is working on the issue as the government wants more LNG terminals on BtB model.”

This is the state of affairs at a time when the local gas production has dwindled from 4.2 bcfd to 3.19 bcfd and the country’s reliance on imported gas (RLNG) has increased.

According to Energy Ministry officials, the Petroleum Division has wasted five years to install LNG terminals. At the same time, it could not lay another RLNG pipeline from Karachi to Lahore (North-South or Pakistan Gas Stream Pipeline). Both the PTI and PDM governments virtually failed to develop infrastructure to import more RLNG. Under the existing scenario, the government has signed contracts with the existing two LNG terminals -- Pakistan Gas Port Limited Terminal (PGPL) and Engro Elengy Terminal (Private) Limited (EETL) with sovereign guarantees against the import of 1.2 bcfd at the maximum. For more RLNG imports, the country needs more LNG terminals and a pipeline.

The Sui Southern Gas Company (SSGC) board has allocated pipeline capacity to the Energas Terminal and signed GTA, the official said. However, the approval for pipeline capacity from the Sui Northern Gas Pipelines Limited (SNGPL) board is still pending and consequently, the GTA could not be signed.

Furthermore, the official said incomplete documentation of the Third Party Access (TPA) associated with the Oil and Gas Regulatory Authority is also causing delays. The interim pipeline capacity has become necessary due to the incomplete OGRA-TPA documents. “The network code, which is crucial for operationalizing the network, also remains incomplete, with no progress towards its finalisation.”

When contacted, the Sui Northern said the ECC in its meeting held on Oct 27, 2021 allocated pipeline capacity to Energas on the SNGPL network. The SNGPL’s Board of Directors in December 2021 accorded in-principle approval for the execution of Access Agreement with Energas. Therefore, it is incorrect to say that the matter is pending with the BOD. The SNGPL, after BOD’s approval, shared the final draft of the Access Agreement with Energas in January, 2022 and again in August, 2022 for their signatures. The Energas, however, did not sign the document and insisted on signing the Allocation Agreement only.