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February 9, 2020

PQA hires Norwegian consultant to evaluate LNG terminal proposals

Business

February 9, 2020

KARACHI: Port Qasim Authority (PQA) has shortlisted a Norwegian consultant-led consortium to assess the feasibilities of liquefied natural gas (LNG) terminals proposed by local and international investors as demand-supply gap of fuel widened to reignite an energy crisis, it was learnt on Saturday.

PQA, an industrial-cum-commercial port, shortlisted DNV-GL Group-led consortium to be appointed as foreign LNG consultant to advise and assist in establishing floating natural gas terminals on build-operate-transfer (BOT) basis at the port. The port currently caters to more than 51 percent of seaborne trade requirements of the country. In October last year, PQA issued request for proposal for appointment of foreign LNG consultants to evaluate and review the feasibility studies, designs of prospective LNG developers and other studies as well as provide project management and quality assurance of implementation, including the commissioning and final acceptance of completion of the LNG terminals.

Four bidders – joint ventures of DNV GL-FRR, Royal Haskoning-Nespak, Ernst and Young -Shamsi Builders-BMT-Asiatek Energi, and Exponent International-Total Dynamic System – submitted their proposals. DNV GL-FRR has been shortlisted, according to an official document.

The consultant would scrutinise and review all studies furnished by LNG sponsors, including Elengy Terminal (Engro, Fatima/Pak Arab, Shell and Gunvor), Energas (Lucky Group, Sapphire, Hallmore and ExxonMobil, PGPL (Pakistan GasPort and Trafigura), GEIP and Tabeer Energy (Mitsubishi). The consultant would also provide recommendations on the suitability of the site and mitigating measures, if any in the form of a technical reports, gap analysis or any other study where required in this regard.

Presently, two re-gasified LNG (RLNG) terminals are under operation in Pakistan. Since 2015 over 19 million tons of LNG has been imported. These terminals have pumped approximately 393.6 billion cubic feet/day of gas into the national gas distribution network in 2019, a 14 percent increase compared with 345.6 billion cubic feet in 2018.

In 2019, Pakistan imported 7.57 million tons of LNG through 123 LNG cargo ships against 108 cargos in 2008. During the same year under review, these terminals supplied around 20 percent of total gas demand.

Last year, petroleum division linked the country’s energy security with a consistent supply of liquefied natural gas, forewarning massive power outages in case of any decision to stop the fuel import. Production of indigenous gas stood at four billion cubic feet per day as against the total demand of six bcfd.

Pakistan is trying to chart a way out of a recurring economic boom-and-bust cycle. Many factories remained shut down for months as there was little gas to spare in winters when domestic heating consumption peaked. In the past, the crisis started to ease after the country started LNG imports four years ago.

Further, the hired consultant would review combine cumulative navigation, operational, safety and security risks assessment of locating LNG terminals in relation to close proximity of each other, including existing LNG terminals in the light of Pakistan LNG Policy 2011 updated till to date and all international codes and standards in this respect.

The port provides shore-based facilities and services to international shipping lines and other concerned agencies in the form of adequate water depth in the channel, berths/terminals, available cargo handling equipment, warehouses, storage areas and providing facilities for safe day and night transit of vessels.