PQA procuring four LNG tugboats as spot buying resumes

KARACHI: Port Qasim Authority (PQA) is seeking foreign supplier to procure four tugs to pull liquefied natural gas (LNG) to the berths as the government restarted spot buying of the fuel after sticking to long-term deals, it was learnt on Thursday.

PQA is acquiring four LNG compatible ASD tugs as the country restarted spot buying of LNG, hoping the growth in LNG imports would relieve energy-induced constraints on economic growth.

With the easing and COVID-19 lockdown and resuming of business and industrial activities, the country has witnessed a drastic jump in fuel demand.

PQA invited bids from international firms for supply/new construction of three 75 tons and one 85 tons bollard pull ASD (LNG compatible tugs) on a five-year lease period. PQA is also acquiring two new pilot boats to expand its operations.

PQA 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, cargo handling equipment, godowns, storage areas and providing facilities for safe day and night transit of vessels. The port currently caters for more than 40 percent of seaborne trade requirements of the country.

Pakistan’s two import terminals have a regasification capacity of 1.2 billion to 1.3 billion cubic feet of gas per day, or about 9 million to 10 million tonnes of LNG a year. Both of the existing LNG terminals are nearly fully utilised.

The Oil and Gas Regulatory Authority has so far granted seven licences for LNG terminal construction and operation. Of those, Pakistan Gas Port Limited and Engro Elengy Terminal Limited are in operation. The two upcoming terminals appear to be Energas Terminal and Tabeer Energy.

The Energas project brings together Pakistani conglomerate Yunus Brothers Group, textiles company Sapphire Group and generator Halmore Power. These companies are all gas users that want to arrange supply to meet their own needs. Tabeer Energy is a project company wholly owned by Japan’s Mitsubishi Corporation.

Pakistan LNG imports clocked in at $2.49 billion in the first 11 months of the current fiscal year, down 18.35 percent from $3.05 billion in the same period last year, according to the Pakistan Bureau of Statistics.

An official said LNG growth stalled, and the use of coal has been rocketing.

“The big challenge facing any new LNG terminal is that the government shows little appetite for providing the kind of financing and offtake guarantees that made the first two projects possible.”

Pakistan has long depended heavily on gas for its primary energy. This has partly been because gas was plentiful and cheap when its indigenous reserves were first developed and partly because it lacks reserves of other fuels.

The government has been striving to boost gas supply by incentivising indigenous production and with other efforts to import gas by pipeline and as LNG.