Page 9 - AsianOil Week 38

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Pakistan unveils new LNG projects
The country has selected companies and consortia for the construction of five new LNG import terminals
COMMENTARY
WHAT:
The five new terminals could come online within the next three years.
WHY:
The country is experiencing chronic natural gas shortages.
WHAT NEXT:
The new terminals
could reduce Pakistan’s interest in piped gas from Iran.
PAKISTAN has taken a major step forward in tackling its chronic natural gas shortages, having shortlisted companies to build five liquefied nat- ural gas (LNG) terminals in the country, either individually or in a consortium.
The news was reported by Reuters, which cited Pakistani Minister of Power and Petroleum Omar Ayub Khan as saying the terminals could be brought online within two to three years. The build-out of regasification capacity comes as the country is aiming to triple LNG imports in a bid to address gas shortages.
The companies and consortia selected include Mitsubishi subsidiary Tabeer Energy; ExxonMobil and Energas; Trafigura and Paki- stan GasPort; Royal Dutch Shell and Engro, and Gunvor and Fatima.
LNG terminals are key to Pakistan’s abil- ity to meet soaring domestic demand for gas, given the country’s limited upstream poten- tial. Existing import facilities have helped to shore up a domestic power shortfall that previously led to frequent blackouts and con- strained economic growth.
Following the opening of the country’s first terminal in March 2015, demand rapidly outpaced production. While natural gas out- put shrank from 36.6bn cubic metres in 2012 to 34.19 bcm in 2018, consumption climbed from 36.6 bcm to 43.58 bcm in the same time- frame, according to the BP Statistical Review of World Energy.
Moreover, state-owned Pakistan LNG’s managing director and chief executive, Adnan Gilani, predicted in April that LNG demand could climb from nearly 6.86mn tonnes in 2018
to 15mn tonnes this year and further to 30mn tonnes over the next three to five years.
Winners
While the selected companies are required to submit details of their plans to the Pakistani Ministry of Ports and Shipping for approval by November 5, Khan said the cabinet had already authorised them.
Additional details – such as what capacity the new terminals would have, or whether any final investment decisions (FIDs) have been taken – were not disclosed. However, Khan said the projects would triple Pakistan’s LNG import capacity on a combined basis.
According to Khan, the cost of building the terminals and finding buyers for the gas will be up to the companies, which will pay the government a royalty based on volume. The government, for its part, will fund con- struction of a $2bn north-south pipeline to distribute the gas that is received, as well as storage facilities.
Islamabad is hopeful that new liquefac- tion capacity will help alleviate the country’s chronic gas shortages. There are two LNG import terminals already operating in Paki- stan, with a combined capacity of 1.2bn cubic feet (34mn cubic metres) per day. A third is anticipated to enter service in 2020, according to Khan, adding 600mn cubic feet (17 mcm) of capacity.
The minister also noted that the results of bidding for a 10-year LNG supply tender for the existing terminals would be announced in two to three weeks’ time.
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