Pakistan awards three permits for LNG terminal construction
By Sara Stefanini | 5 October 2011 12:19 GMT
Pakistan’s Oil and Gas Regulatory Authority (OGRA) has awarded three licences for the construction of the country’s $500 million first LNG receiving terminal an official at OGRA confirmed to Interfax on Wednesday.
The licences were issued to Pakistan GasPort, a subsidiary of Pakistani energy company Associated Group, Turkey’s Global Energy Holding and Pakistani conglomerate Engro Chemical, said the official, who asked not to be named. The three companies had already been granted provisional licences for the construction of the Mashal LNG station at Port Qasim, on Pakistan’s southern coast.
“Prime Minister Yousaf Raza Gilani has directed OGRA and the Port Qasim Authority to expedite the process of LNG imports, Assim Hussain, the minister for petroleum and natural resources, told Pakistan’s Express Tribune on Wednesday.
The move comes about a month and a half after Islamabad overhauled its LNG policy to make it more “stakeholder friendly”, as part of its renewed push to speed up the project’s progress.
The government also announced on Sunday that it would add its own representatives to the board of directors for the Port Qasim Authority, after accusing the board’s private sector representatives of creating bottlenecks in the development of LNG projects, according to the Express Tribune.
Talks have been underway for several years to build a terminal that can import 500 million cubic feet per day (14.16 million cubic metres per day), but have been frequently stalled by
accusations of corruption.
The project was initially awarded to Belgo-French GDF Suez in February 2010, but the Supreme Court of Pakistan annulled the deal in April 2010 on the grounds that the Ministry of Petroleum & Natural Resources had bypassed a lower bid by the Pakistani investment group Fauji Foundation. It was challenged in the Supreme Court again in August over claims that the government intended to scrap a tender process that awarded the contract to Holland’s 4Gas.
The government’s decision to amend its 2006 LNG policy, however, was seen as an earnest effort to entice foreign investors to build an LNG regasification and storage terminal, analysts told Interfax in late August (see Pakistan’s LNG policy shows ‘sincere’ push to up gas supplies, 30 August).
The policy eliminated earlier conditions that importers agree to long-term supply contracts and have sufficient reserves for at least 20 years, and that they receive government permission to import spot cargoes, among other changes.
Pakistan GasPort, Global Energy Holdings and Engro have also been involved in the country’s LNG terminal development for the past few years. Pakistan GasPort, for instance, introduced its $162 million fast-track LNG import terminal and liquid petroleum gas (LPG) extraction project in 2007, detailing a plan that would boost the country’s gas supplies by 13% and LPG production by 60%.
The LNG terminal would allow Pakistan to import gas for the first time. The country is suffering from severe load-shedding as domestic production slumps and demand, particularly from the industrial and power sectors, continues to grow.private]
Pakistan awards three permits for LNG terminal construction
The licences were issued to Pakistan GasPort, a subsidiary of Pakistani energy company Associated Group, Turkey’s Global Energy Holding and Pakistani conglomerate Engro Chemical, said the official, who asked not to be named. The three companies had already been granted provisional licences for the construction of the Mashal LNG station at Port Qasim, on Pakistan’s southern coast.
“Prime Minister Yousaf Raza Gilani has directed OGRA and the Port Qasim Authority to expedite the process of LNG imports, Assim Hussain, the minister for petroleum and natural resources, told Pakistan’s Express Tribune on Wednesday.
The move comes about a month and a half after Islamabad overhauled its LNG policy to make it more “stakeholder friendly”, as part of its renewed push to speed up the project’s progress.
The government also announced on Sunday that it would add its own representatives to the board of directors for the Port Qasim Authority, after accusing the board’s private sector representatives of creating bottlenecks in the development of LNG projects, according to the Express Tribune.
Talks have been underway for several years to build a terminal that can import 500 million cubic feet per day (14.16 million cubic metres per day), but have been frequently stalled by
accusations of corruption.
The project was initially awarded to Belgo-French GDF Suez in February 2010, but the Supreme Court of Pakistan annulled the deal in April 2010 on the grounds that the Ministry of Petroleum & Natural Resources had bypassed a lower bid by the Pakistani investment group Fauji Foundation. It was challenged in the Supreme Court again in August over claims that the government intended to scrap a tender process that awarded the contract to Holland’s 4Gas.
The government’s decision to amend its 2006 LNG policy, however, was seen as an earnest effort to entice foreign investors to build an LNG regasification and storage terminal, analysts told Interfax in late August (see Pakistan’s LNG policy shows ‘sincere’ push to up gas supplies, 30 August).
The policy eliminated earlier conditions that importers agree to long-term supply contracts and have sufficient reserves for at least 20 years, and that they receive government permission to import spot cargoes, among other changes.
Pakistan GasPort, Global Energy Holdings and Engro have also been involved in the country’s LNG terminal development for the past few years. Pakistan GasPort, for instance, introduced its $162 million fast-track LNG import terminal and liquid petroleum gas (LPG) extraction project in 2007, detailing a plan that would boost the country’s gas supplies by 13% and LPG production by 60%.
The LNG terminal would allow Pakistan to import gas for the first time. The country is suffering from severe load-shedding as domestic production slumps and demand, particularly from the industrial and power sectors, continues to grow.private]