Engro awaits govt’s approval to build second LNG terminal

KARACHI: Pakistani conglomerate Engro Corp is awaiting government’s nod to bring in liquefied natural gas (LNG) floating storage regasification unit (FSRU) that has already been acquired last year, people familiar with the matter said on Wednesday.

Engro Elengy Terminal (EETL) and its partner Excelerate have secured a larger and more technologically-advanced FSRU, Excelerate Sequoia, which is expected to arrive at Port Qasim shortly after all regulatory and Sui Southern Gas Company’s (SSGC) approvals, they said.

Ghias Khan, president and CEO of Engro Corporation, said Engro pioneered investment in Pakistan’s LNG terminal sector to help solve one of our most pressing issues of energy shortages.

“Today, we have put Pakistan on the global map of LNG market and paved the way to attract more investment from new entrants in this sector. EETL is committed to continue to play a pivotal role to meet Pakistan’s growing energy needs by developing the first open access onshore LNG terminal at Port Qasim to ensure long-term energy security for Pakistan.”

EETL’s partner Excelerate Energy took delivery of FSRU from Daewoo Shipbuilding and Marine Engineering shipyard in South Korea in June last year.

“We are all set and the vessel would arrive as soon as regulatory approvals are received,” an anonymous official told this scribe. “We are negotiating with the SSGC and other regulatory authorities, and we are hopeful the required approvals would be received soon.”

The vessel has a storage capacity of 173,400 cubic meters and is capable of operating as both an FSRU and a fully tradable LNG carrier.

Yusuf Siddiqui, CEO of Engro Vopak & Elengy Terminal Ltd said: “in partnership with Royal Vopak, we remain committed to deliver on our promise of operational excellence and expansion plans to fuel the country’s economic growth and prosperity.”

Engro built Pakistan’s first LNG terminal in 2015 and since then has completed transfer of over 20 million metric tons of LNG by handling over 322 cargoes.

The new FRSU will increase the terminal’s capacity by more than 150 million cubic feet per day and storage capacity by more than 25,000 cubic meters to help reduce the gas supply shortfall.

As a result, Pakistan can potentially save more than $45,000 per day in state-run LNG supply chain costs, with the private sector assuming risks and making investments under a third-party access framework (TPA).

Once the sector opens under the TPA regime, an onshore LNG asset is the next step towards evolution of the Pakistani gas market.

Engro and Royal Vopak have already announced a project targeting final investment decision in the next 12 – 14 months. This is the highest volume handled by any floating LNG terminal in this time frame. The terminal has also achieved another milestone

through the send-out of more than 1,000 billion cubic feet of natural gas, equivalent to energy required to generate around 175 MW.

EETL, a joint venture between Engro Corporation and Royal Vopak of the Netherlands, utilizes the FSRU exquisite, which is co-owned by Excelerate Energy LP (Excelerate) and Nakilat.

Built in a world record time of 332 days, EETL is recognised as one of the fastest built and most utilised regasification terminals in the world.

The terminal has a storage capacity of 150,900 cubic meters and peak regasification capacity of up to 690 million cubic feet per day.