A group of U.S. companies is proposing to build and operate a $4.4-billion LNG import and storage terminal in Pakistan, local media reported on Monday, as Pakistan faces high gas import costs with disrupted Qatari LNG flows.
The companies, supported by the Trump Administration, include Global Vision Energy Partners (GVEP) and Khanjee Holdings, plus international strategic partners and Luxembourg-based General Mediterranean Holding, according to the reports.
The integrated LNG project in Pakistan envisages imports, storage, re-gasification, gas transmission, and gas sales to large customers.
According to Pakistani media, the companies proposing the project have reportedly obtained consent for the potential site from the Port Qasim Authority. The consortium is also said to have applied with the Pakistani Oil and Gas Regulatory Authority (OGRA) to obtain a provisional license.
The companies have created a special purpose vehicle (SPV), while the government of Pakistan has also supported the project through the Energy and Maritime Affairs Ministries, Pakistani news outlet Dawn reports, citing documents it had seen.
The proposal of the project, which would also serve as Pakistan’s first LNG storage facility, came to light days after reports emerged, again in Dawn, that a consortium of QatarEnergy and Lucky Group had ditched a multi-million-dollar project to establish an LNG terminal at Port Qasim. The consortium, Energas, attributed the decision to abandon the project to “fundamental changes” to Pakistan’s energy policy and requirements, and unresolved fiscal and policy issues.
Meanwhile, Pakistan faces a costly winter with few LNG cargoes managing to move from Qatar through the Strait of Hormuz.
Pakistan has been struggling to keep the lights on after Qatar in March declared force majeure on its exports following Iranian strikes that caused damage to its Ras Laffan LNG export hub. Since then, Pakistan has been forced to turn to the spot LNG market and pay hefty premiums for the occasional shipment.
Term supplies from Qatar are cheaper than the spot LNG cargoes, for which Asian and European buyers compete ahead of the winter, driving up prices.
Pakistan will have to pay in excess of $1 billion to secure LNG for the winter months, as spot prices soar amid massive disruptions to Qatari term supply.
By Charles Kennedy for Oilprice.com
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