GasPort plans $94m virtual LNG pipeline from Gwadar

The company — a joint venture comprising the Pakistan GasPort, Al-Qasim Gas and Jamshoro Joint Venture — had applied for the Ogra licence earlier this month. It has already entered into an agreement with Gwadar International Terminals for utilising Berth 3 at the Gwadar Port to import LNG on a Floating Storage Unit (FSU) of 20,000cbm capacity for delivering the fuel to tankers for onward distribution to the individual customers in the CNG, industrial and housing sectors, according to a company document. The virtual pipeline will comprise 1,500 bowsers.

“We will move LNG onto special purpose trucks for regasification at the site of our industrial clients once we get the Ogra licence and other regulatory approvals,” said the GGPL executive, who didn’t want to be identified. The project is quite flexible and can respond to the market trends with annual revenue projected to be around $1 billion.

About 54 per cent of the project investment, which includes $24.04m working capital for the purchase of LNG, will be used on lease equipment, according to the document. The project will deliver 100mmcfd in the first year of the commencement of the operations. The LNG supplies will be ramped up to 200mmcfd in the second year and 300mmcfd in the third year.

Last year, Ogra issued provisional licences to two companies — Daewoo Gas and LNG Easy — for developing virtual pipelines for supply of the fuel through bowsers to off-grid consumers. Daewoo plans to set up the terminal at the Gwadar Port for onward distribution by trucks. Ogra said the decision was a step towards gas market liberalisation to boost competition in the domestic gas market, as well as support the nation’s economic growth through reliable supply of energy to the consumers.

Singapore-based LNG Easy says it will invest $200m to develop a system to use trucks and trains to move the LNG discharged from ships at Port Qasim in Karachi to the off-grid industrial users by August. It will import 350,000 tonnes of LNG a year, and plans to boost supplies to 1.2m tonnes in two years, its chief executive officer Yasir Hamid recently told Faisalabad businessmen.

However, neither of the two companies licensed by Ogra has so far entered into a binding agreement for utilizing their facilities with the port managers at Gwadar or Karachi.

“We are in the process of appointing Depot Holders on a non-exclusive basis, mainly to provide LNG to the consumers in a radius of about 50km around Karachi,” the GGPL document said. Besides, the company will supply imported gas to the Gwadar industrial zone when completed.