Engro’s floating terminal carrying 148,517 cubic metres of LNG arrives

KARACHI: Engro’s Elengy Terminal (Pvt) Limited’s (ETPL) floating storage and regasification unit (FSRU), with an initial cargo load of 148,517 cubic meters of liquefied natural gas (LNG), docked at the port Qasim on Thursday.
Industry official said the floating LNG terminal is likely to minimize growing energy problems face by the country, including dependence on the imports of expensive fuel oil. The arrival of the LNG and facility is an important milestone as the country face huge energy deficit in recent years, they added.
Shaikh Imran-ul-Haq CEO of ETPL said the company would start pumping the gas into the state-run Sui Southern Gas Company’s system by Friday noon.
Industry officials said that the supply, carried by FSRU Exquisite, is not the part of the government’s LNG deal with Qatar, and it has been procured by the state-run Pakistan State Oil “on an ad hoc arrangement from the Qatar Gas.”
The rate, at which the LNG is procured, is also not disclosed by the government. Besides, there is still uncertainty about the arrival of next cargo.
The commodity, reaching Pakistan, is equivalent to 3,000 mmcfd, and would be injected into the system over the next 15 days, as per the government’s agreement with the Engro Elengy. Agha Jan Akhtar, chairman Port Qasim Authority, said the FSRU comfortably docked the terminal. The port authority has completed the infrastructure in a record time and now it was up to the ministry of petroleum to manage the supply of LNG to the terminal,” he said.
The terminal has been built at a cost of $135 million in a record time of 335 days of signing with actual construction of 179 days and the FSRU vessel is worth an additional USD 300 million.
Engro Corp funded this project under bridge loans. However, recently Asian Development Bank (ADB) has approved a $30 million project loan for the terminal.
Along with ADB’s loan, International Finance Corporation is expected to fund 15 percent of the project cost and local banks will finance around 35 percent.
The rest of the project financing will come from equity proceeds.
The fuel, suitable for use at most of the country’s combined cycle power plants, will be supplied to Sui Southern Gas Company’s gas distribution network via a new high pressure pipeline.
The plant has the capacity for re-gasification of up to 600 mmcfd.
The government had tendered for its requirement of 200 mmcfd but Engro has developed a surplus capacity setup.
SSGC has tendered for another terminal at Port Qasim, while a consortium of three investors is developing plans for another facility in nearby Karachi.
Pakistan urgently needs to utilize its existing power generation capacity fully, while reducing its reliance on costly imported diesel fuel for electricity generation.
Regasification of LNG will allow generation facilities to reach their maximum potential, using a cleaner and more efficient fuel, and will support the country’s push for greater energy security and diversification.
The converted fuel will help the government make an estimated savings of about $1.0 billion per annum on its current fuel import bill of nearly $15 billion.
A statement by EETL said the country believed that Pakistan urgently needs to utilize its existing power generation capacity fully, while reducing its reliance on costly imported diesel fuel for electricity generation; and the regasification of LNG will allow generation facilities to reach their maximum potential whilst using a cleaner, cheaper and more efficient fuel for greater energy security and diversification.
“It is estimated that the converted fuel will help the government make an estimated savings of about $1.0 billion per annum on its current fuel import bill of nearly $15 billion,” the statement said.