KARACHI, Oct 18: Sui Southern Gas Company (SSGC) on Tuesday signed a consultancy advisory agreement with a consortium led by ABN-Amro Bank for the implementation of its first integrated LNG project.

SSGC Managing Director Munawar Baseer Ahmed and ABN-AMRO Bank Country Manager Naved A. Khan signed the agreement on behalf of their respective organizations.

A press release issued here said that SSGC after realizing the future shortage of gas in the country had decided to go for the option of importing LNG to bridge the gap between supply and demand.

The gas supplier said that the LNG project was a vital component of the National Energy Plan as it would result in enhancing SSGC’s supply capacity by adding from 350 to 500 mmcfd to the availability of natural gas, vital to meet the country’s growing needs for energy, by the year 2010.

The press release further said that the consultants would prepare a concept report on the LNG import project and would recommend appropriate options for the project structure. “This will involve undertaking detailed studies of strategic market, commercial and regulatory issues pertaining to the project”.

The first phase envisages the preparation of pre-qualification and bidding documents for the invitation and short-listing of potential joint ventures or consortia for the supply of the LNG.

The consultants will also render assistance in formulating the LNG import strategy in line with the National Energy Plan and provide input for the LNG import policy framework, says the SSGC press release.

The LNG import project is in line with the government’s strategy to secure future energy supplies for the nation for which the government has been reviewing the feasibility of importing gas through trans-national pipelines as well as LNG.

With the vision of supplementing local natural gas supplies, SSGC envisages an integrated LNG import contract inclusive of procurement, transportation, storage and re-gasification facilities to be set up on a Build, Own and Operate (BOO) basis in the Port Qasim terminal or near the Karachi Port. The expected delivery capacity would be 2.5 million tons of LNG per annum, equivalent to about 300 mmcfd with the option for larger volumes of up to 3.5 million tons of LNG or approximately 500 mmcfd of natural gas.

As the next step following the appointment of ABN-Amro, lead consultants will submit an inception report, to undertake the pre-feasibility and recommend pre-qualification criteria, for investor consortia to undertake the project. Five international and local consortia had responded to SSGC’s request for proposal. The consortium of ABN-Amro and Poten and Partners was short-listed subsequent to technical and financial evaluation of the proposals.

The project, which is expected to be set up on a Build, Own, Operate (BOO) or Build, Operate, Transfer (BOT) basis, in the Port Qasim Terminal or the Karachi Port Trust (KPT) area of Karachi, will consist of a comprehensive supply chain organization along with a dedicated terminal for LNG, the first of its kind in Pakistan. Major shipping companies, LNG firms, specialists in terminal construction and consortia are expected to be involved in the commissioning of the project, the press release concludes.