Vopak To Co-Own Pakistan LNG Terminal
Dutch terminals operator Royal Vopak and Pakistani conglomerate Engro Corporation have firmed up a deal outlined late last month whereby Vopak is to invest in Engro's LNG import terminal.
Vopak and Engro said July 20 they have signed a share purchase agreement according to which the Dutch firm will acquire a 29% share in Elengy Terminal Pakistan Ltd (ETPL). No financial details were disclosed for the deal which is expected to close in 4Q 2018. Once completed, ETPL shareholders will be Engro, Vopak, and the World Bank's International Finance Corporation.
ETPL wholly owns Engro Elengy Terminal (EETPL), owner of Pakistan's first LNG import facility which has operated since 2015 at Port Qasim. It adjoins the Engro Vopak chemical storage terminal.
Vopak says that Pakistan, with over 200mn people, is expected to need more gas for power generation, industry and making fertilisers. The Engro LNG terminal consists of a jetty and a 7.5-km gas pipeline, connected to the grid of Engro's sole gas customer, Sui Southern Gas Company, a Pakistan government owned entity. EETPL holds a 15-year floating storage and regasification unit (FSRU) time charter.
FSRU Exquisite is on charter from US shipowner Excelerate (see banner photo of ship, courtesy of Excelerate) and has capacity to regasify 7.1bn m3/yr (690mn ft3/d).
Vopak CEO Eelco Hoekstra said: "We very much look forward to further building, inside and outside of Pakistan, on our excellent partnership with Engro. This new step in our cooperation gives Vopak an excellent entry in the growing Pakistan LNG market. This fits very well our ambitions to grow and diversify our service offering in LNG."
This will be the third operating LNG import terminal in which Vopak has a stake. It has a 50% interest in the long-established 12bn m3/yr Gate LNG terminal at Rotterdam in the Netherlands, and a 60% stake in the 7.2bn m3/yr Altamira LNG import terminal in Mexico. In addition, it is a partner in the planned 5bn m3/yr 'German LNG' terminal project in Brunsbuttel that subject to a final decision may start up late 2022. Vopak also owns or part-owns multiple oil, oil product, and chemicals tankfarms and terminals around the world.
Engro CEO Ghias Khan said that its relationship with Vopak goes back over two decades: "We're excited to enter into this mutually beneficial partnership with Royal Vopak which will allow Vopak to realise their strategy of entering the Pakistan energy market and will pave the way for Engro and Vopak to collaborate in further ventures at home and abroad using their combined resources and expertise."
This week's deal follows a memo of understanding signed November 2017 between Engro and Vopak to explore potential growth opportunities in LNG, chemical storage, and terminal operations.