FRIDAY SEPTEMBER 21: Government to go for fast-track projects: 200 mmcfd LNG to be imported on tolling basis

ISLAMABAD: The government has decided to go for fast-track projects to import 200 mmcfd Liquefied Natural Gas (LNG) on tolling basis, it was learnt. Sources told Business Recorder that it was decided by the committee constituted by the Prime Minister for development of LNG infrastructure that fast-track projects would be done on tolling basis wherein subsidiary of SNGPL/SSGC would procure LNG from international market either on term supply contract or on spot basis.
Dr Asim Hussain, Advisor to the Prime Minister on Petroleum and Natural Resources was quoted as saying that short-term means the project(s) involving utilisation of existing terminals to receive RLNG which can bring in around 200 mmcfd RLNG in six to eight months and would cover a minimum supply period of about two years.
The advisor reportedly stated that vessels having onboard re-gasification facilities would be used for shipment of LNG and the terminal would be used for RLNG receiving from the vessels against a tolling fee. The funding of the projects would be done by using the Gas Infrastructure Development Cess (GIDC) as the advisor was quoted as saying that section 4(1) of the GIDC Act, 2011 allows utilisation of cess for LNG projects contingent to the approval of competent forum. Therefore, he said the federal government can inject money in subsidiary of SNGPL and SSGC as its direct equity.
As the meeting was informed that the technical feasibility of the terminal acquired by the subsidiary of the SNGPL/SSGC has not yet been done, the advisor was of the view that the project should be initiated on competitive basis where other terminals may be given a chance to compete.
The meeting also discussed about long-term LNG project, which the advisor stated could take 18-24 months to complete with one-year ramp up period. The tenure of the long-term LNG project would be 10 to 15 years extendable with mutual consent. The subsidiary of SNGPL and SSGC will invite private companies, including existing capacity holders, terminal construction license holders to bid for supply of RLNG or construction of terminal. The subsidiary of SNGPL and SSGC would also be eligible to construct new LNG terminals. The meeting also noted that LNG procurement from international market could be through negotiations which are not allowed under PPRA Rules and to keep things simple and transparent, it was agreed to process the long-term LNG projects on integrated basis.