Engro Elengy seeks SIFC intervention to expand LNG terminal

KARACHI: Engro Elengy Terminal Limited (EETL), a joint venture between Engro Corporation and Royal Vopak, has asked the Special Investment Facilitation Council (SIFC) to help resolve the issues with Sui Southern Gas Company (SSGC) over expanding its liquefied natural gas (LNG) import terminal.

The EETL has sought the intervention of SIFC to address the concerns raised by SSGC regarding Third Party Access (TPA) at EETL.

EETL has been operating Pakistan’s first LNG import terminal (through its wholly owned subsidiary Engro Elengy Terminal (Private) Limited) since 2015. It has handled 33 million tonnes of LNG, 68 percent of all LNG imports of Pakistan since inception and is considered as one of the highest utilized LNG receiving terminals in the world.

Pakistan faces severe gas depletion, which is expected to worsen in the coming years. “Owing to the shortage of FSRUs (which are vessels utilized to regasify the liquid LNG) globally after the Russia-Ukraine conflict, expansion of existing terminals is the quickest way to bring additional gas into the country. The expansion can only be carried out by bringing in a larger FSRU in the country," official documents available to The News showed.

The government, through its Economic Coordination Committee (ECC)’s decisions, has already approved TPA to allow private parties to carry the burden of LNG value chain based on increased gas demand-supply dynamics without any offtake commitments from the government.

The Oil and Gas Regulatory Authority (OGRA) is currently developing the regulations around the TPA to Karachi to address the critical issue of the gas demand and supply gap in Pakistan.

“EETL has been in discussions with SSGC, SNGPL and PSO since 2022 on expansion of the terminal under TPA regime. The purpose of the TPA regime is to enable third parties to utilize unused portions/excess regasification capacities of LNG via expansion of the existing regasification terminal located at Port Qasim,” the documents said, and pointed out that a non-binding, non-committal Term Sheet to the Terminal Coordination Agreement (TCA) was finalized in May 2023 after multiple rounds of negotiations with all parties, which is ready to be signed.

To keep Royal Vopak's interest intact in Pakistan and enable future investments in the LNG sector by potential international parties, EETL requested SIFC to address the concerns being envisaged by SSGC regarding TPA expansion at EETL and ask SSGC to sign the non-binding, non-committal Term Sheet to move on to the next stage of project execution.

It also asked SIFC to conclude all past and ongoing investigations to encourage a positive investment climate, especially in the LNG sector, in view of the rising gas demand in the country.