(Bloomberg) — Pakistan’s Energas plans to start the nation’s largestliquefied natural gas import terminal in 2021 to help meet soaring demandonce it gets the green light to build the project.
Energas, a consortium of large domestic users, aims to begin constructionof the $140 million to $160 million facility next year, Chief ExecutiveOfficer Anser Ahmed Khan said in an interview. The project is beingsupported by Exxon Mobil Corp.
Energas and Exxon first proposed the terminal to Pakistan’s previousgovernment in 2017, at that time aiming to complete it by this year. Theventure is one of two that submitted bids in October for regulators’permission to build terminals and tap demand that is expected to outgrowimport capacity.
“There is a lot of demand in Pakistan and it will just grow,” said Khan,who was vice president for LNG at EDF Energy Ltd. in London before takingup his current role in 2017. “The market is price sensitive so we need toplay that card right.”
The Energas proposal still faces several hurdles, including obtainingregulatory approval. It also hasn’t signed off-take deals for much of itscapacity and hasn’t made a final investment decision. It has received bidsfor a floating storage and regasification unit that will be connected toPort Qasim terminal in Karachi, and will award the contract by March, Khansaid Wednesday.
Tabeer Energy, the Mitsubishi Corp. unit that also applied to build an LNGterminal, couldn’t be reached for comment.
The two ventures are vying to tap into what’s expected to be one of theworld’s bright spots for LNG imports, with purchases set to quadruple by2040 amid stagnating domestic production and robust demand, BloombergNEFforecast last week in a report.Chronic Cycle
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Pakistan is trying to chart a way out of a recurring economic boom-and-bustcycle. Many factories used to remain shut for months at a time as there waslittle gas to spare in winters when domestic heating consumption peaked, acrisis that started to ease after the nation started LNG imports four yearsago.
The consortium includes the Yunus Brothers Group conglomerate and SapphireGroup, and the group alone can consume about a quarter of the terminal’scapacity of 1 billion cubic feet of gas a year, Khan said.
It will compete with Tabeer and existing import plants for customers,including textile mills, power plants and compressed natural gas fuelstations, to make the terminal viable, Khan said, adding Energas plans tooffer rates 25 percent lower than existing terminals in order to do so.Exxon has agreed to support securing supply for the terminal.
“When we look at the Pakistani sector, we see demand only going up,” Khansaid. “That’s why we feel there is enough slack for us to flow our gas intothe system.
*–With assistance from Dan Murtaugh and Stephen Stapczynski.*
