SIFC directs Petroleum Division to remove obstacles to Qatar’s LNG terminal investment

Caretaker Prime Minister Anwar-ul-Haq Kakkar is chairing the SIFC meeting at the PM House.  - pid/file
Caretaker Prime Minister Anwar-ul-Haq Kakkar is chairing the SIFC meeting at the PM House. – pid/file
  • The PD called for resolving all issues to make way for Qatari investment.
  • Investment has been pending for the last five years due to red tape.
  • The Secretary of the Petroleum Department is personally trying to resolve all the issues.

ISLAMABAD: The Special Investment Facility Council (SIFC) has directed the Petroleum Division to remove hurdles in the Qatari investment of $200 million in an LNG terminal. news Quoting sources on Friday.

“Energas plans to set up an LNG terminal with a regas capacity of 750-1,000 MMcfd, in which Qatar Gas will have a 49% stake and Energas will have a 51% stake. To be built on the BTB model, investment from Qatar has been stalled for the last five years due to bureaucratic red tape,” an official told the publication on condition of anonymity.

Qatar raised this issue several times with Pakistan Tehreek-e-Insaf (PTI) and Pakistan Democratic Movement but no progress could be made on OGRA network code, tax holiday, TPA exemption, SNGPL GTA (Gas Transmission Agreement).

“This time the SIFC has taken up the issue with the intervention of the top military leadership and directed the heads of the petroleum division to resolve all the issues and report back so as to ensure investment from Qatar.”

A senior official told the publication that following the intervention of SIFC, the Petroleum Division Secretary is personally looking into the issue and trying to resolve all the issues.

The Energas terminal, which is to be operated without any government guarantee on RLNG takeoff, will have the capacity to re-gasify 1,000 million cubic feet per day (mmcfd) of LNG.

However, Qatar is not the only country interested in LNG projects. Pakistan Port Gas Limited’s LNG Terminal-2 and Japan’s Mitsubishi-owned Tabir LNG Terminal have been in the pipeline for a long time.

The projects were to be commissioned on the BTB model in 2021, but have not started yet due to red tape.

Energy Minister Muhammad Ali said, “The ministry is working on the issue as the government wants more LNG terminals on the BTB model.” news,

According to Energy Ministry officials, the Petroleum Division has wasted five years in setting up the LNG terminal. Also, it could not lay another RLNG pipeline from Karachi to Lahore (North-South or Pakistan Gas Stream Pipeline).

Both the PTI and PDM governments failed to develop infrastructure to support the import of RLNG. Under the current scenario, the government has signed contracts with the existing two LNG terminals – Pakistan Gas Port Limited Terminal (PGPL) and Engro Elengi Terminal (Pvt) Limited (EETL) with sovereign guarantee against import of a maximum of 1.2 Bcfd.

However, if Pakistan wants to import more RLNG it will need more terminals and pipelines.

The Sui Southern Gas Company (SSGC) board has allocated pipeline capacity to the Energas terminal and signed the GTA, the official said. However, approval of the pipeline capacity from the Sui Northern Gas Pipeline Limited (SNGPL) Board is still pending and as a result, the GTA could not be signed.

Additionally, the official said incomplete Third Party Access (TPA) documents related to the Oil and Gas Regulatory Authority are also causing delays. Interim pipeline capacity has become necessary due to incomplete OGRA-TPA documents.

“The network code, which is critical to making the network operational, is also incomplete, with no progress toward finalizing it.”

When contacted, SNGPL said the ECC has allocated pipeline capacity to Energas on the SNGPL network in its meeting dated October 27, 2021.

The gas supplier said its board of directors had given in-principle approval for the execution of the access agreement with Energas in December 2021 and it was wrong to blame them.

Following BOD approval, SNGPL shared the final draft of the Access Agreement with Energas for their signature in January, 2022 and again in August, 2022. However, Energas did not sign the document and insisted on signing only the allocation agreement.

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