ISLAMABAD: The International Finance Corporation (IFC) of the World Bank group will invest $27.5 million in the construction of a terminal at Port Qasim, thus enabling Pakistan to import liquefied natural gas (LNG), Dawn learnt on Saturday.

According to details, the IFC’s investment in the $130m project will be $7.5m in the form of equity for 20 per cent shareholding, and a loan of $20m that will assist the project in securing long term debt financing from other foreign and local lenders.

The financing is scheduled to be approved by the World Bank group in mid-September.

IFC’s involvement in a greenfield project with an established local sponsor will exert a strong signalling effect to private investors, thereby encouraging greater private participation in future energy sector projects.

The project will support development of critical energy infrastructure needed to address the country’s growing gas supply deficit, helping reduce its reliance on future imports of oil and thereby helping relieve an ongoing constraint in the country’s balance of payments.

Moreover, it will support economic growth by enabling the import of natural gas as a feedstock for industrial use and electric power generation.

The terminal, to be completed by early 2015, will be the first LNG import facility in Pakistan.

The project involves use of a floating storage and regasification unit which will store the imported LNG and regasify it before transporting the gas through a 24km pipeline to the existing SSGC gas network near Port Qasim.

The LNG branch jetty will be built near the existing chemicals import and handling terminal operated by another subsidiary of Engro Corp. The major portion of the pipeline will be built inside the port industry zone.

Following a public tendering process in 2013, Engro Elengy Terminal (ETPL), a fully owned subsidiary of Engro Corporation, has signed a 15-year LNG service agreement with the Sui Southern Gas Company (SSGC).

Published in Dawn, July 27th, 2014