| Code: 90492 |

TIN news:  The government has issued Letter of Intent (LoI) to award the contract for setting up second Liquefied Natural Gas (LNG) terminal at Port Qasim in Karachi. As per details, the Board of Directors of Pakistan LNG Terminals Limited (PLTL) in its meeting held on May 6 approved a financial bid submitted by Pakistan GasPort Limited (Consortium) which includes Fauji Oil Terminal and Distribution Company Limited (FOTCO) which offered a levelized (service) charge of $0.4177 per MMbtu for handling of 600 Million Cubic Feet per Day (MMCFD) of LNG at the terminal.
The next process is to sign LNG Services Agreement (LSA) which is under negotiation with successful bidder. This was revealed by Federal Minister for Petroleum Shahid Khaqan Abbasi in response to a question by Business Recorder, adding that a consortium led by Pakistan GasPort Limited, a company of the Associated Group, has emerged as the lowest bidder in the tenders invited from investors interested in setting up the country”s second LNG terminal for handling imports. Responding to a question, the Minister said, “there is no harm in uploading the details of Pakistan-Qatar LNG contract (signed on February 10, 2016) on websites of Pakistan State Oil (PSO) and Inter State Gas Systems, excluding confidential clause. I will direct both the entities to upload the details,” the Minister said. He added the government has no plans to increase the rate of Gas Infrastructure Development Cess (GIDC) for different gas consumers.
The government is expected to collect Rs 145 billion through GIDC on gas sales during the current financial year from gas consumers, excluding the domestic sector. When contacted, the successful bidder committed that within a week LSA will be inked with Pakistan LNG Terminal Limited (PLTL), a government subsidiary, to look after LNG-related matters. The bidder said that after signing the LSA agreement the project will be implemented in 11 months. Shahid Khaqan Abbasi stated that the price in electricity rate would be 4 cents per unit lower through LNG-based power generation compared to oil based generation.
The country would reportedly save around $1.5 billion annually by using imported gas through second LNG terminal. Pakistan will not only have clean energy but it would be cheaper. The second LNG terminal will have a capacity of 600 mmcfd re-gasification capacity which would be transported to three LNG based power plants with total generation capacity of 3600 MW, leading to revival of economy which has suffered due to energy crisis. National Accountability Bureau (NAB) and the Public Procurement Regulatory Authority (PPRA) had already given clearance to PLTL to award the contract in accordance with law.

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