Pakistan's federal cabinet has approved the construction of an LNG import terminal to be built in Karachi that would initially handle around 200,000 Mcf/d, an official of the ministry of petroleum said Friday.
Elengy Terminal Pakistan Terminal Ltd. would construct the terminal on property owned by the Port Qasim Authority.
Elengy was awarded a 15-year contract, which comes with servicing fees of $0.66/MMBtu, the official said.
According to the agreement, Elengy has 11 months following approval to build the terminal, the official said. In a second phase of construction, the complex would double its capacity to 400,000 Mcf/d.
If the government fails to make arrangements for LNG imports after completion of the terminal, it is bound to give Elengy $1.5 million per day. Pakistan is expected soon to hold talks with Qatar to finalize plans to import 3.5 million mt/year of LNG, the ministry official said. Pakistan and Qatar signed a memorandum of understanding for LNG imports in February 2012, but progress to complete the deal has been slow due to disagreements over the gas price.
Pakistan produces around 4.2 Bcf/d of gas, far short of demand of around 6 Bcf/d, which rises to almost 6.4 Bcf/d in winter, according to petroleum ministry estimates.
