To curtail the gas crisis, Pakistan must prioritize the expansion of existing terminals under the approved Third-Party Access (TPA) rules on an immediate basis while eventually transitioning towards onshore terminals for greater energy security.

Highlighting the achievements of Engro Elengy Terminal (EETL), Yusuf Siddiqui, CEO of EETL, shared that EETL has set new industry benchmarks in over five years of its safe and essentially non-stop operations, with an availability factor of around 98 percent. EETL now contributes around 15 percent of gas supplies to Pakistan and can be considered the country’s largest “gas field” (630-690 mmscfd).

As the most utilized regasification terminal in the world, it has enabled Pakistan to save more than $3 billion through import substitution of furnace oil. Since its inception, EETL has achieved send-out of more than 1200 billion cubic feet (BCF) of RLNG/natural gas. Further, its partnership with world-class organizations like Royal Vopak of the Netherlands has brought global expertise and foreign investment to Pakistan for the development of the LNG sector.

He stated that LNG imports, which now constitute around 30 percent of the total gas supply mix, have been instrumental in bridging the energy shortages as the production of indigenous gas continues to decline drastically.

To mitigate the gas shortfall in the future, the government has adopted a favorable policy of encouraging private sector involvement in the LNG sector, but there is a need to remove any roadblocks that impede operationalization of additional capacity of existing LNG terminals under TPA rules, as allowed under the LNG Policy 2011 and LNG Supply Agreement (LSA) with SSGC. The TPA will allow private players to have access to the terminal capacity and bring LNG into the country, with no guarantee or liability required by the government or state-owned entities. This step will facilitate LNG market development as a whole and mitigate circular debt in the gas sector.

While the expansion of existing terminals offers a short-term and quickest possible solution to bridge the supply-demand gap, Pakistan must eventually shift its focus from FSRU-based terminals to onshore LNG terminals. Based on global experience, Yusuf stated that the deployment of the first or second FSRU is followed by an onshore terminal to ensure energy security, the longevity of the gas market, and the creation of a strategic national asset for the country.

With an expected capital outlay of $500-600 million, Engro Corporation and Royal Vopak are evaluating the development of Pakistan’s first multi-functional onshore LNG terminal that will offer regasification, bunkering, and LNG trucking services. If approved, the project will be built in a phased approach on the open-access terminal concept. The onshore terminal would result in reduced foreign exchange outflow compared to FSRUs, create greater market competition, and help optimize the LNG supply chain.

Source: Pro Pakistani