LNG import, terminal for power generation: EVTL and Kapco jointly seek government approval

EVTL and Kapco have jointly sought approval from the government to import liquefied natural gas (LNG) and setting up terminal for power generation purposes, Business Recorder has learnt. The Kapco intends to import LNG for power generation purposes. SSGC/SNGPL have already assured transport of RLNG to Kapco's power plants, subject to finalisation of GTRA with Kapco.
Sources said that EVTL and Kapco wrote a joint letter on April 9, 2010, on the proposal to import LNG for power generation and setting up a terminal.
In a meeting, chaired by Secretary, Petroleum and Natural Resources, on May 14, 2010 the proposal of LNG import and setting up a terminal was discussed. The meeting was informed that EVTL planned to establish an open access floating terminal (tolling type) in the private sector, and Kapco was interested to import LNG, using EVTL's terminal, for its own use.
"It is understood that the proposal of LNG import and terminal can be developed under 'LNG Policy 2006', without bringing about any major amendment(s)," the meeting was informed.
In the process, EVTL will require a licence from the Oil and Gas Regulatory Authority (Ogra), under Clause 4 of LNG Policy 2006, and other necessary NOCs/ Implementation Agreement with the concerned Port Authority. Additional Clause 6 of the Policy provides regulatory framework for terminal as well as third-party access.
Since Kapco will be importing LNG for its own use, under Clause 3.1 (f) of the policy it would not require any licence for import of LNG. However, under Clause 6.4 of Policy, Kapco will have to seek Third-Party Access, from Ogra, for transmission of LNG under a Gas Transmission/Tariff Agreement (GTA) with SSGC/SNGPL.
Ogra would also approve the negotiated LNG price, under the Policy. SSGC/SNGPL have already assured of transporting LNG to Kapco's power plants, subject to finalisation of GTRA with Kapco.
The Petroleum Secretary directed co-ordination between concerned agencies for requisite licences/NOCs, and noted that in case of any bottleneck in LNG Policy 2006, specific proposals/amendments may be suggested.