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Business

August 5, 2017

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Engro Elengy sticks to plan of setting up second LNG terminal

Engro Elengy sticks to plan of setting up second LNG terminal

KARACHI: Engro Elengy Terminal Limited (EETL), the introducer of new energy source liquefied natural gas (LNG) in Pakistan, sticks to its plan of setting up second terminal with a capacity to re-gasify 600 million metric cubic feet/day (mmcfd) from imported LNG, its top official said. 

Jahangir Piracha, chief executive officer at EETL told media the new terminal would be constructed in collaboration with Shell and Fatima Group at Port Qasim. 

Engro’s first 100 percent self-financed Elengy Terminal with a capacity to inject 600 mmscfd re-gasified LNG into the system emerged as the biggest gas source in Pakistan since its launch two and half years back. It has already handled 6.1 million tonnes of LNG since commissioning through 100 shipments, thereby bridging national natural gas deficit by 20-25 percent in the process.

“This was an unthinkable scenario just a few years ago as despite the LNG policy being enacted in 2006 there had been no practical move to develop the LNG ecosystem,” Piracha said. Pakistan is saving around 1.7 billion dollars each year due to fuel arbitrage savings between diesel and LNG alone.

Newly-elect Prime Minister Shahid Abbasi, in an interview, told Reuters that LNG import could increase fivefold to 30 million tonnes by 2022 as compared to the current annual volume.

Abbasi said a consortium of Exxon Mobil, Total, Mitsubishi, Qatar Petroleum and Norway’s Hoegh is expected to decide by September whether to build LNG terminal with handling capacity of nine million tonnes.

With the supply of LNG, more than 2,200 megawatts power generation capacity has been brought online or switched from more expensive liquid fuels. RLNG also energised close to a dozen projects, generating billions of dollar economic activity in the country. More than 750 compressed natural gas stations started operating in Punjab for the first time with RLNG supplies.

Revival of fertiliser industry is also made possible with a substantial increase in production. This contributed significant savings to national exchequer and had direct contribution to GDP. The running of fertiliser plant at full capacity provides relief to farmers in terms of cheap and easily available urea fertiliser. It also brightens prospects of export of urea fertiliser in order to earn precious foreign exchange.

Historically, unavailability of gas to fertiliser plants has resulted in outflow of valuable foreign exchange on urea imports. Additionally, 500 industrial units, mainly comprising of export-oriented textile units have been revived leading to job creation for youth and the hope of reversing the recent and concerning slide of textiles exports.

Engro’s terminal is providing round-the-clock supply of natural gas at a utilisation rate of 100 percent for the floating storage and regasification unit (FSRU). This achievement makes it the only FSRU in the world that is operating at such high re-gas rates. Engro is also one of just 15 companies in the world, which is operating at such an advanced terminal storage and regasification technology that enables such efficiencies.

Piracha said Engro Elengy terminal has proved to investors inside the country that the business model works leading to a dramatic investment in the ecosystem that will lead to 2-3 more terminals in the near future with even more profound and positive impact on the country’s energy situation. “Gas shortage will be eliminated, and cost of tariff will be positively affected.”

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