• Proposal envisages four tanks holding 560,000 cubic metres at Port Qasim in first phase of the $4.4bn plan that also includes a 1,100km upcountry gas pipeline
•
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that → envisage → pipeline
Project would charge $4.93 per mmBtu for terminal and storage, $1.91 for transmission over first decade
ISLAMABAD:
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Project → charge → decade
A private consortium of US companies, backed by the Trump administration, is pushing for an investment of up to $4.4 billion in an integrated liquefied natural gas (LNG) project in Pakistan, covering imports, storage, re-gasification, gas transmission and sales to large consumers on a ‘merchant basis’.
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consortium → back → basis
The development comes after Energas, an earlier frontrunner consisting of the Lucky Group and QatarEnergy, abandoned a similar project citing fundamental changes in Pakistan’s energy policy and requirements, as well as longstanding unresolved policy and fiscal issues.
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Energas → come → policy
The US consortium comprises Global Vision Energy Partners (GVEP) and Khanjee Holdings, both related firms, along with strategic co-investors from other countries and General Mediterranean Holding, a Luxembourg-based US financial conglomerate.
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consortium → comprise → countries
The sponsors have reportedly secured consent from the Port Qasim Authority for the proposed project site.
uncertain
sponsors → secure → site
An application has also been filed with the Oil and Gas Regulatory Authority (Ogra) for a provisional licence.
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application → file → licence
A special purpose vehicle (SPV), a separate legal entity established to hold specific assets and liabilities and isolate financial risks, has been incorporated.
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vehicle → establish → risks
Government facilitation has also been conveyed through the Ministry of Maritime Affairs and the Ministry of Energy’s Petroleum Division, according to documents seen by Dawn.
uncertain
facilitation → convey → Dawn
The project has been approved for consideration under the US Trade and Development Agency’s (USTDA) project preparation programme.
asserted
project → approve → programme
It may also receive partial financing from the US Development Finance Corporation, backed by export credit guarantees from the US Export-Import Bank for technology, equipment and services.
uncertain
It → receive → technology
Pakistan currently has no LNG storage facilities, leaving its domestic re-gasified LNG supplies entirely dependent on import supply chains and international energy prices.
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Pakistan → have → chains
The sponsors plan to develop the project in two phases.
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sponsors → plan → phases
The first phase will comprise an LNG terminal and storage facility with four tanks and an estimated annual throughput of 35 billion cubic feet (BCF), at a cost of $1.7bn.
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phase → comprise → 1.7bn
The second phase will involve the construction of a 1,100km, 42-48-inch pipeline to transport gas upcountry, with a capacity of around 1.2 billion cubic feet per day (BCFD).
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phase → involve → day
This will take the total project cost to $4.4bn.
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This → take → 4.4bn
The government had previously pursued a similar North-South gas pipeline project with Russia.
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government → pursue → Russia
The proposed venture is being structured as a merchant infrastructure platform to meet domestic regasification requirements while establishing a physical LNG storage and trading hub in South Asia for US and Middle Eastern suppliers.
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venture → propose → suppliers
The consortium is engaging local investors for up to 10 per cent equity participation, with indicative investments starting at $50 million per investor.
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investments → engage → investor
The sponsors also expect to attract strategic co-investors, including global energy and infrastructure funds and institutional investors such as Grey Rock Investment Partners, Kohlberg Kravis Roberts & Co, Blackstone Inc., Saudi Arabia’s Public Investment Fund and the Kuwait Investment Authority.
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sponsors → expect → Partners
Their participation remains subject to due diligence, investment approvals and definitive agreements.
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participation → remain → diligence
No binding equity commitments have been confirmed so far.
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commitments → bind → ?
The SPV will develop, own and operate the project as a regional LNG storage, regasification and trading hub, serving Pakistan’s domestic gas market alongside US and Middle Eastern LNG suppliers.
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SPV → develop → suppliers
The model will not depend on a single government-backed offtake arrangement.
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model → depend → arrangement
Re-gasification tariffs for the domestic market will be submitted to Ogra for approval, while other commercial services, including storage, tolling and transshipment, will be priced on market-based terms.
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services → submit → terms
The US sponsors consider Port Qasim strategically important because of its existing port infrastructure and marine access for LNG carriers.
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Qasim → consider → carriers
Under the proposed financing structure, the project will have a 70:30 debt-to-equity ratio.
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project → propose → ratio
GVEP will hold a 26pc stake, followed by General Mediterranean Holding with 24pc, and Khanjee Holdings and strategic co-investors with 20pc each.
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GVEP → hold → each
Local investors will hold the remaining 10pc in the first phase, which is estimated to cost $1.32bn (70pc of the $1.7bn cost).
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which → hold → cost
The final project cost will be determined after the execution of engineering, procurement and construction (EPC) contracts and other construction and supply agreements.
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cost → determine → contracts
The commercial model is expected to combine long-term tolling and storage agreements, transshipment arrangements and take-or-pay commitments where appropriate, with the remaining capacity reserved for merchant activities.
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model → expect → activities
The proposed tolling tariff for the terminal and storage facility is $4.93 per million British thermal units (mmBtu), while the separate transmission tariff is estimated at $1.91 per mmBtu for the first 10 years.
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tariff → propose → years
These rates are projected to decline to $2.20 and $0.92 per mmBtu, respectively, thereafter.
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rates → project → mmBtu
The LNG terminal and storage facility will have four tanks, each with a capacity of 140,000 cubic metres, providing total static storage capacity of 560,000 cubic metres.
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terminal → have → metres
Based on three inventory turnover cycles annually, the facility is expected to handle approximately 35.6BCF of LNG a year, with storage capacity of around 11.9BCF per cycle.
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facility → base → cycle
The Aporia
