Government seeks second LNG terminal before 2018 polls

Pakistan has launched a tender for a second liquefied natural gas (LNG) import terminal, a government official said on Tuesday. The nation of 190 million people can only supply about two-thirds of its gas needs. The ruling party, which campaigned on promises of solving the energy crisis, wants to ease shortages by expanding LNG shipments before a 2018 general election.
The official, who declined to be named, said the tender was launched earlier this month with a request for proposal (RFP) by January 24. The government wants the terminal, to be built at Port Qasim in the southern city of Karachi, to be operational by around mid-2017, the official said.
The project includes a floating storage and regasification unit (FSRU), along with the building of infrastructure such as a new jetty and pipeline. "Companies can decide if they want to bid for all of it or parts of it, but if you look at the model that was used for the first project in Pakistan, the model chosen was that one company was awarded to procure the whole project," said the source, referring to Pakistan's Engro Corp.
Elengy Terminal Pakistan Ltd, wholly-owned by Engro Corp, completed the import terminal at Bin Qasim port in less than a year - reflecting the urgency of the country's energy needs. The terminal received its first spot imports in April 2015. Large FSRUs take several years to construct and there are few players with anything available within Pakistan's time frame. Those that might include Norway's BW Gas and Hoegh LNG.
"I would expect this process to take several months before it comes to a conclusion and I'm sure there will be strong interest because the first project was a success," an LNG industry source said. "It's a challenging timeline but I think it's feasible if they make decisions in a timely manner." The official said this was a re-tender after a deal announced with state-controlled Sui Southern Gas Company ran into difficulties, declining to elaborate. Pakistan is separately finalising a deal with Qatar to import more LNG to meets its surging domestic energy needs.