Government directs SSGCL and SNGPL to work on LNG terminals

The Ministry of Maritime Affairs is collaborating with the Petroleum Division to facilitate the new LNG terminal developers in streamlining the process and working the bureaucracy to obtain various NOCs and handover of the possession of land for tie-in facilities near Pakistan Steel Mills.

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The federal government has directed Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) to hold meeting work on removing the hindrances in the development of two new liquified natural gas (LNG) terminals.

According to Pakistan’s leading news agency, Dawn, this information is from a compliance report submitted by the inter-ministerial committee to the CCoE on the 15th of April upon instructions of the federal cabinet.

Reportedly, upon approval of the federal cabinet in August 2019, the letter of intent to five investors interested in the formation of the LNG terminal. Following all the standard procedures like Quantitative Risk Assessment (QRA), the two interested parties, namely Energas and Tabeer Energy accepted the role and deposited $2 million in initial concessional payment out of the $10 million agreed.

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The rest $8 million will be deposited following the signing of the implementation agreement.

It is worth mentioning here that in 2019, private-sector players approached the government, seeking allocation of idle capacity of liquefied natural gas (LNG) terminals for gas import at competitive rates in a bid to feed power plants and industrial units without the involvement of state-run enterprises.

Thus, the Ministry of Maritime Affairs in collaboration with the Petroleum Division facilitated the new LNG developers with the bureaucratic procedures, smoothing the process for the investors, incentivizing the companies to set their plants in Pakistan.

There were reports in media earlier in the year, that in January the petroleum division officials told the CCoE that nothing was being done on-field and everything was being done by the Maritime Affairs division on paper only.

According to Dawn, the inter-ministerial committee had last week directed the SSGC to give the new entrants the possession of the land on the same terms and conditions as the other two terminals.

Regarding the Pakistan State Mill’s land, the committee decided that SSGC should sign a lease agreement of land with PSM handing over the tie-in space to the two terminal developers.

Reportedly, the Ministries of Industries had no reservations regarding the transfer of land to the SSGC, however in 2016 SSGC had received 11 acres of land in the area and till now, no lease was paid to PSM, rendering the lease void.

Anser Ahmed Khan, CEO of Energas said in an international conference, “we have to rationalize the costs. Pakistan is the eighth largest LNG market. Opportunity is there, I think as a country we have to realize how we can open up the market. There are 11 suppliers controlling 80 pc of world LNG, we need to encourage these major volume holders to help Pakistan. The interesting thing about Pakistan is that there are six to eight companies who want to set up LNG terminals, allow them all. It is beneficial for the country.”

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