ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) on Wednesday issued a licence to Elengy Terminal Pakistan Limited (ETPL) – a subsidiary of Engro Corporation – to construct a terminal at Port Qasim (PQ) for landing and re-gasification of liquefied natural gas (LNG) to be imported early next year.

The issuance of licence for construction and operation of the LNG terminal is one of the most critical stages towards import of about 500mmcfd (million cubic feet per day) LNG originally targeted for November 2014 by the PML-N government. The target has now been revised to April 2015.

The licence was issued after the Elengy Terminal Pakistan “fulfilled all requirements of Ogra’s LNG rules and LNH policy of the federal government”, an Ogra spokesman said. He confirmed that ETPL had also submitted separate “No Objection Certificates” (NOCs) from the Ministry of Defence and the Port Qasim Authority.

The Ogra had earlier linked issuance of licence for LNG re-gasification terminal to NOC’s from the ministry of defence and PQA which took almost six months to verify security and performance standards of the proposed terminal operator. Before a final decision to grant a licence, Ogra had got evaluated the specifications of ETPL by SGS – a foreign independent consultant.

The consultant in its evaluation report termed the application of ETPL in compliance with Ogra’s LNG Rules of 2007 and Federal Government’s LNG Policy of 2011. The Ogra spokesman said the regulator had also conducted public hearing in the matter and the concerns of the stakeholders have also been taken care of before grant of licence.

In view of prevailing natural gas shortages requiring fast track gas imports and fulfilment of technical and legal requirements by ETPL, “Ogra has granted licence to ETPL for construction of LNG receiving terminal”, the spokesman said. This decision of Ogra will help to mitigate the energy crisis in the country, he added.

The licence has initially been issued for two years which would be considered for renewal depending on successful operations of floating storage and regasification unit (FSRU) and LNG receiving terminal.

Under the licence, ETPL would not be authorised to conduct any other regulated activity other than receiving LNG and re-gasifying it for onward transportation to the national gas transmission system.

Initially, Ogra has issued licence for handling of 500mmcfd of LNG but the ETPL would be empowered to seek permission from the regulator for expansion in handling capacity as required under 2007 LNG rules.

The ETPL has been directed to submit within 15 days project implementation and construction of terminal time line. On completion of the terminal, Ogra would appoint an international consultant of repute to evaluate quality and performance standards before allowing formal commercial operation of the terminal.

The proposed development and operator of the country’s first LNG terminal would be required under the licence conditions to meet environmental and security standards. In case of any violation, the Ogra is empowered under the licence rules to impose fine or revoke licences depending on the severity of the violation.

An ETPL official said the company was fully geared to start construction of the terminal within few days. He said the terminal would have installed capacity to handle about 600mmcfd of LNG even though the government and the licence conditions required 500mmcfd capacity.

He said the ETPL would consider import of additional capacity to meet its own requirements or some large private consumers for which it would separately seek approval.

Published in Dawn, June 19th, 2014