New terminals to boost storage capacity

Pakistan is all set to install two more liquefied natural gas (LNG) import terminals over the next 12-15 months to deal with the ballooning gas crisis after the government approved connection of the terminals with transmission and distribution network from Karachi to upcountry areas.

With the two terminals, gas storage capacity doubles up

The terminals are being set up by the private sector, meaning that the government will not be liable to pay capacity charges if it does not utilise the facilities.

It is pertinent to mention that the government pays up to $272,000 per day to each of the two existing LNG terminals.

The new terminals to directly sell imported gas to industries and domestic consumers

The new terminals will directly sell imported gas to industries and commercial and domestic consumers at competitive prices instead of selling through the government. However, the state will always have the option of gas import through the new terminals.

The government has allowed, in principle, each of the two terminals to transport 300-350 million cubic feet per day (mmcfd) of LNG through the network of Sui Northern Gas Pipelines Limited (SNGPL).

“They are expected to formally ink a gas transportation agreement (GTA) in the next one to two months,” said an official associated with one of the two companies while talking to The Express Tribune.

The total cost of constructing the two terminals is estimated at around $1 billion. “It costs around $500 million to construct a jetty and acquire a Floating Storage and Regasification Unit (FSRU),” he added.

CCOE allots capacity to LNG terminals

“The government has facilitated the allocation of pipeline capacity firm offer to 2 upcoming (LNG import) terminals,” said Federal Minister of Energy Hammad Azhar on his official Twitter handle on Saturday.

“The new terminals will have no take-or-pay liability (daily capacity charges) on the government like previous terminals and they will be based on business-to-business models,” he said.

“These measures will enhance the capability of the system to handle imported gas in a cost-efficient manner.”

The industry official termed the inking of the gas transportation agreement a must prior to the start of construction of new terminals. “A terminal can be set up in around one year,” he said.

Tabeer and Energas had announced a few years ago that they would establish LNG terminals at Port Qasim in Karachi. However, it took a long time to acquire construction licences and get permission to connect the terminals with the gas transmission and distribution network across the country.

Each terminal to have installed capacity to import 1,000 mmcfd of LNG