$450 million LNG terminal at Port Qasim: SSGC, Shell finalise LNG import project deal

The Sui Southern Gas Corporation (SSGC) and Shell Gas & Power (SG&P) are close to sign an agreement on the establishment of 3.5 million tons per annum (mtpa) LNG import project as an additional source of gas supply to meet soaring demand of the country.
Under the agreement SG&P would also develop a liquefied natural gas (LNG) terminal at Port Qasim as a re-gasification facility at an estimated cost of $450 million, well-placed sources told Business Recorder on Friday.
The Mashal LNG Terminal (MLT) would be constructed under the country's first LNG project "Pakistan Mashal LNG Project" to ensure uninterrupted supply of the ever-needed fuel to industries, power or fertiliser plants etc on sustainable basis.
The SG&P, which would be appointed as "LNG Developer", would also be responsible for purchasing LNG supplies, transporting them to the MLT besides designing, constructing, operating and owning the proposed terminal at Port Qasim.
"The SSGC and Shell Gas & Power have finalised talks on the Mashal LNG Project and Shell would soon formally be appointed as a LNG Developer under an integrated project structure," sources close to the project said.
They said the SSGC, which has been appointed by the government of Pakistan as a project facilitator, had earlier received at least eleven Expressions of Interest (EoIs) from various local and international companies and consortia.
"The SSGC had short-listed the Consortium of Fauji/Fotco/4Gas/Sojitz and Shell Gas & Power in its bidding and now has finally selected the Shell as LNG Developer," sources added.
Those pre-qualified in the Pakistan Mashal LNG Project bidding process included AES Pakistan Ltd, BP Gas Marketing Ltd, Consortium of Fauji/Fotco/4Gas/Sojitz, ENI Pakistan Ltd, Mitsui/Kogas, Persian LNG and Shell Gas & Power, they added.
They said the MLT would be used as an LNG import terminal and have facilities of receiving, storage and re-gasification of the LNG.
"The proposed terminal will have a 3.5 mtpa LNG import capacity which is equivalent to 500 MMCFD of gas," said the sources. They said the government had estimated that supply of gas through the LNG import project would be possible by 2010-11.
Sources said that the SG&P would be allowed to import LNG in accordance with applicable rules and regulations of imports and would have to obtain a license from Oil and Gas Regulatory Authority (Ogra) to construct the MLT in line with Ogra Ordinance, 2002.
They said the LNG terminal would be constructed on the basis of a three-point criterion comprising strict technical, financial and health, safety and environmental standards.
On technical side, they said the terminal would be constructed on technical standards prescribed by the Ogra from time to time and internationally acceptable industry technical standards.
Sources said that the SG&P would also need to ensure that the project complies with World Bank's health, safety & environmental standards, Pakistan's Environmental Protection Act 1997 rules, regulations, National Environmental Quality Standards, Pakistan's health, environment and safety standards etc.