ISLAMABAD: Pakistan has given the go-ahead to five consortia, including ExxonMobil, Royal Dutch Shell and Mitsubishi, to progress with their liquefied natural gas (LNG) terminal plans, Power and Petroleum Minister Omar Ayub Khan told Reuters on Friday.

The move comes on the heels of the arrests of two Pakistan business executives involved in building the country’s previous LNG terminals, cooling sentiment in the industry.

Pakistan is seen as a big growth market for the global LNG industry as domestic gas production slips in tandem with a growing industrial economy hungry for gas.

Ayub downplayed any impact the arrests may have had on investors’ sentiment, saying the interest from multinationals spoke for itself.

“That is a ringing endorsement that (our) policies are clear and transparent,” he said. “It’s a competitive market.” The groups approved to progress are Tabeer Energy, a unit of Mitsubishi, Energas with partner Exxon; Pakistan GasPort and commodities trader Trafigura; Engro with partner Shell, and Gunvor with Pakistani conglomerate Fatima.

Tabeer Energy, Engro and Energas already announced plans for the terminals which will be Floating Storage and Regasification Unit (FSRUs) vessels. These can be newbuild or converted LNG tankers, speeding up the delivery of the import projects.

Exxon and Shell did not respond to requests for comment. Mitsubishi has project details on Tabeer Energy’s website. Engro, Fatima and GasPort were not immediately reachable for a comment.

Trafigura declined to comment on the specific project but said it was “committed to grow and expand its existing regas (regasification) capacity” in Pakistan.

The five groups must submit plans for the terminals to the ministry of ports and shipping by Nov 5 for approval, but cabinet has already approved them, Ayub said, adding they could be in operation within two to three years.

While the consortia will pay for the construction of the terminals and royalty fees, Pakistan’s contribution will be to fund the building of a $2bn north-south pipeline to distribute the gas, and storage facilities, he said.

Ayub said a third 4.5 mtpa terminal could start next year. Imports amounted to 6.7 mtpa in 2018 and are set to rise to 7.9 mtpa this year, according to Refinitiv data.

The new terminals “will make a significant dent in the gas shortage,” the minister said.

Published in Dawn, September 21st, 2019

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