Pakistan Government Issues Letter of Intent for Second LNG Terminal

The Pakistani government has issued letter of intent (LoI) to award the contract for setting up second LNG terminal at Port Qasim in Karachi.

The next process is to sign LNG Services Agreement (LSA) which is under negotiation.

Pakistan GasPort Limited led consortium’s financial bid was approved by Pakistan LNG Terminals Limited board on May 6, reported Business Recorder, a local financial daily. The consortium includes Fauji Oil Terminal and Distribution Company (Fotco). The consortium has offered a levelised (service) charge of $0.4177 per million British thermal units (mmbtu) for handling a capacity of 600 million cubic feet per day (mmcfd),

The terminal will come up at Port Qasim which already has the first import terminal. Pakistan’s only operational LNG terminal at Port Qasim has so far regasified and pumped over 77 billion cubic feet of gas (bcf) into the national gas distribution network. The terminal became operational about a year ago. Utilising Excelerate's floating storage and regasification vessel (FSRU), the Exquisite, the facility has the capacity to deliver up to 690 million ft3/d of natural gas directly to Sui Southern Gas Company's natural gas pipeline system.

The proposed second LNG terminal will have a capacity of 600 mmcfd re-gasification capacity which would be transported to three LNG based power plants with total generation capacity of 3600 MW, Business Recorder added.

Earlier this week Pakistan’s oil minister said LNG was short, medium and long term solution for gas crisis in Pakistan. He said the government is expecting the private sector to come forward as infrastructure was available to deliver LNG based gas to customers. The minister added that energy crisis could not be resolved without injecting more gas in the system.

Country’s gas production is hovering around 4 bcfd, while total demand has reached 8 bcfd and the gap is partly being bridged by imported LNG primarily from Qatar.