Elengy bids for LNG contract

In a bid to address the energy crisis severely affecting Pakistan, Engro Corporation subsidiary Elengy Terminal Pakistan Limited (ETPL) has bid for a fast track LNG contract to import up to 3 million tpa of LNG or 400 million ft3/d of RLNG (natural gas) for the next fifteen years.

Over the last seven years, Engro’s investments in Pakistan have exceeded the US$ 1.8 billion mark with the company continuing to make strategic investments in sectors that can help avert the looming energy crisis. The LNG issue – one of the most controversial issues in the Pakistani energy sector – has been delayed several times. The energy deficit has increased alarmingly, consequently limiting economic growth and power supply to the nation. Gas shortage is estimated to be between 1.5 billion ft3/d - 2 billion ft3/d. Two tenders for LNG import have already been scrapped this year.

ISGS had issued a tender on 15 August for the development of LNG import infrastructure on a fast track basis. On 14 October, only two bidders had submitted their techno-commercial proposal in a single stage two envelope process, which saw ETPL gaining a technical score above the threshold limit as per vetting of their technical proposal by a third party international consultant, QED (it is pertinent to mention that in previous LNG rounds, QED was approved by competitors who cited no objection). The other bidder, Pakistan GasPort Limited (PGPL), was disqualified, as their technical proposal did not meet the requirements of the RFP.

Price comparison

The ETPL tolling price for importing LNG is US$ 0.66 per million Btu, extremely low compared to international benchmarks and nowhere close to the US$ 2.5 per million Btu quoted by TIP and consultant of PGPL Mr Munawer Baseer. In Indonesia tolling price is US$ 1.8 per million Btu for handling LNG at a floating terminal and US$ 1.2 per million Btu for a land terminal. Average tolling price (based on 2010) in North America was US$ 0.73 per million Btu, US$ 0.87 in China, US$ 0.81 in Europe, US$ 0.89 in South Korea and Japan and US$ 0.72 in the Middle East.

Accusations overturned

Accusations have been made that ETPL’s site is not conducive to importing LNG. However, a quantitative risk assessment (QRA) was conducted by Lloyd’s Register UK, which reviewed hazard identification, navigational simulations and dispersion modeling in 2011. Lloyd’s approved the site, citing certain operational advantages of it.

Adapted from press release by Ted Monroe

Read the article online at: https://www.lngindustry.com/liquid-natural-gas/12112013/etpl_bids_for_lng_contract_to_import_lng/