Stakeholders urge Ogra to grant construction licences for LNG terminals

Published April 20, 2021
The petitioners have required construction licences for Ogra before taking final investment decisions (FIDs) on setting up of LNG terminals at designated sites as all other regulatory processes have already been completed. — Reuters/File
The petitioners have required construction licences for Ogra before taking final investment decisions (FIDs) on setting up of LNG terminals at designated sites as all other regulatory processes have already been completed. — Reuters/File

ISLAMABAD: Participants at a public hearing overwhelmingly supported the cases of two separate firms for grant of construction licences at the earliest to help reduce energy costs and gas shortage that currently stood at about three billion cubic feet per day (BCFD).

The hearing presided over by Ogra Chairman Masroor Khan was attended by Member Gas Muhammad Arif, Member Oil Zainulabideen Qureshi and a number of large consumer groups like cement producers, CNG station operators, power companies and textile industry.

It took up two separate petitions for grant of licence for construction and establishment of LNG re-gasification terminals including all allied facilities at Port Qasim, Karachi. Petitioners Tabeer Energy Private Ltd (TEPL) and Energas Terminal Private Ltd (ETPL) applied under Ogra (LNG) Rules 2007 for grant of licence.

The petitioners have required construction licences for Ogra before taking final investment decisions (FIDs) on setting up of LNG terminals at designated sites as all other regulatory processes have already been completed.

The licence would allow the developers to set up terminals, purchase LNG supplies, re-gasify it through proposed LNG terminals and supply RLNG to the domestic market and use themselves in their sister companies.

Both applicants said they had their own customers in the private sector and would arrange LNG imports without any liability to the government by utilising the pipeline network of gas utilities. Both parties declined to share the name of manufacturers of Floating Storage and Regasification Unit (FSRU) saying this could hamper their business plans.

Tabeer representative Saad Qazi said the company was targeting to make their terminal operational in 24 months after the FID is made based on the issuance of construction licence.

He said the project will take little longer because the company will also have to construct a 24km pipeline including 19km offshore pipeline from Chan Bundo Island where the terminal will be put up.

The terminal will have tie-in facility with Sui Southern Gas Pipeline network at Port Qasim. It will have 750-1,000 million cubic feet per day (mmcfd) capacity for which Mitsubishi led consortium had their own gas customers including a spare portion for other private customers. He said about 500 mmcfd RLNG would be supplied to Northern and almost equivalent to Southern parts of the country.

He said the talks were in progress with SSGCL and SNGPL for gas transportation agreement.

He said that company had MoU with world-class terminal providers and also signed MoU with SNGPL and had understanding with SSGCL to operate in gas sector.

Energas’s Ansar Khan said his company had secured the licence, land allocation and related regulatory approvals for setting up of LNG terminal of its own in 2022 and provide cheaper fuel to its partner group companies who were holding their multiple business projects to unreliable energy supplies.

They include Lucky Group, Younas Brothers, Sapphire Group and Halmore and so on who did not get gas supply and had to rely on furnace oil to meet export orders and domestic production.

A number of business groups from cement, transport and textile sectors said the two applicants should be allowed new terminals to induct additional RLNG into the system and unlock a number of projects waiting in the sideline due to gas shortages.

While the CNG station owners welcomed the private sector LNG terminals to reduce costs but asked the regulator to ensure the new terminals also had some spare capacity for private consumers outside their business groups to avoid creation of private sector monopolies like public sector monopolies of two gas utilities.

“All the stakeholders unanimously asked the authority to expedite the process of grant of licencees to private investors”, said the Ogra in its concluding statement, adding it was imperative to meet the future energy demand of the country that private sector should be encouraged to import and supply LNG to various sector of economy.

Published in Dawn, April 20th, 2021

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