ISLAMABAD: The Oil & Gas Regulatory Authority (Ogra) has granted construction licences to Tabeer Energy and Energas to start construction of Liquefied Natural Gas (LNG) Receiving Terminals at Port Qasim for import, regasification, storage and supply of LNG to their customers.

The licences would be valid for 15 years. Both companies are stated to have their own customers in the private sector and would arrange LNG imports without any liability to the government by utilising pipeline network of gas utilities which they have not been able to secure so far.

Both these licences are subject to two conditions. They should have implementation agreement with Port Qasim Authority (PQA) for construction of Floating Storage & Regasification Units (FSRU) before the start of construction works. Secondly, they have to sign gas transportation agreements (GTAs) with Sui Southern Gas Company Ltd (SSGCL) and Sui Northern Gas Pipelines Ltd (SNGPL) for supply of LNG to their customers using the national gas pipeline network.

The regulator which had conducted the public hearing for construction licences on April 18 had already granted 10-year marketing licences to Energas and Tabeer Energy for sale of regasified-liquefied natural gas (RLNG) to their customers.

The licences for construction and establishment of LNG re-gasification terminals including all allied facilities at Port Qasim, Karachi have been issued to Tabeer Energy Private Ltd (TEPL) and Energas Terminal Private Ltd (ETPL) under Ogra Ordiance 2002 and Ogra (LNG) Rules 2007.

The construction licences was a pre-requisite for the two investor groups for taking final investment decisions (FID) on setting up of LNG terminals. Tabeer Terminal has to be located at Chara Chan Waddo, Jhari Creek while Energas at Chara Creek. 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.

Tabeer Energy — a subsidiary of major global firms led by Mitsubishi of Japan was targeting to make their terminal operational in 24 months after the FID is made based on the issuance of construction license. Energas — a company put together by local business groups expects beginning development works over the next six months with targeted completion in 18 months.

Tabeer’s terminal would take little longer because the company would also have to construct a 24km pipeline including 19km offshore pipeline from Chara Chan Waddo Channel in Jhari Creek 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 750-1000 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. Tabeer plans to supply about 500 mmcfd RLNG each to Northern and Southern pipeline networks.

Both companies are currently in talks with SSGCL and SNGPL for gas transportation agreement but have been struggling to secure pipeline capacity. Without allocation of 300-500mmcfd of pipeline capacity, no terminal can become commercially viable which has to go up overtime with the implementation of proposed North-South Pipeline being undertaken by the government in collaboration with Russia.

Published in Dawn, April 30th, 2021