SIFC directs Petroleum Division to remove hurdles in Qatar’s LNG terminal investment

SIFC directs Petroleum Division to remove hurdles in Qatar's LNG terminal investment

  • PD asked to resolve all issues to make way for Qatari investment.
  • Investment has been pending for last five years due to red-tapism.
  • Petroleum Division secretary personally trying to resolve all issues.



ISLAMABAD: The Special Investment Facilitation Council (SIFC) has directed the Petroleum Division to remove hurdles in the $200 million Qatari investment in an LNG terminal, reported The News on Friday citing sources.

“Energas plans to establish the LNG terminal with Regas capacity of 750-1,000 MMCFD having a shareholding of 49% of Qatar Gas and 51% of Energas. To be erected on BtB model, the investment from Qatar has been stalled for the last five years due to bureaucratic red-tapism,” an official, who spoke on the condition of anonymity told the publication.

Qatar raised the issue during the Pakistan Tehreek-e-Insaf (PTI) and Pakistan Democratic Movement multiple times but no progress could be made on OGRA network code, tax holiday, TPA exemption, SNGPL GTA (gas transmission agreement).

“This time SIFC has taken up this issue with the intervention of top military leadership and directed the mandarins of the Petroleum Division to resolve all the issues and report back so that the investment from Qatar could be ensured.”

A senior official told the publication that following the SIFC’s intervention the Petroleum Division secretary is personally looking into the issue and trying to resolve all issues.

The Energas Terminal, which is to be operated without any government guarantee on RLNG takeoff, will have the capacity to re-gasify up to 1,000 million cubic feet per day (mmcfd) of LNG.

However, Qatar is not the only one interested in LNG projects. Pakistan Port Gas Limited’s LNG Terminal-2 and Tabeer LNG Terminal owned by Japan’s Mitsubishi have been in the pipeline for a long time.

The projects were supposed to become operational in 2021 on a BtB model but are yet to take off because of red tape.

“The ministry is working on the issue as the government wants more LNG terminals on BtB model,” said Energy Minister Muhammad Ali told The News.

According to Energy Ministry officials, the Petroleum Division has wasted five years to install LNG terminals. At the same time, it could not lay another RLNG pipeline from Karachi to Lahore (North-South or Pakistan Gas Stream Pipeline).

Both the PTI and PDM governments failed to develop infrastructure to support the import of RLNG. Under the existing scenario, the government has signed contracts with the existing two LNG terminals — Pakistan Gas Port Limited Terminal (PGPL) and Engro Elengy Terminal (Private) Limited (EETL) with sovereign guarantees against the import of 1.2 bcfd at the maximum.

However, if Pakistan’s wishes to import more RLNG then it would need more terminals and a pipeline.

The Sui Southern Gas Company (SSGC) board has allocated pipeline capacity to the Energas Terminal and signed GTA, the official said. However, the approval for pipeline capacity from the Sui Northern Gas Pipelines Limited (SNGPL) board is still pending and consequently, the GTA could not be signed.

Furthermore, the official said incomplete documentation of the Third Party Access (TPA) associated with the Oil and Gas Regulatory Authority is also causing delays. The interim pipeline capacity has become necessary due to the incomplete OGRA-TPA documents.

“The network code, which is crucial for operationalising the network, also remains incomplete, with no progress towards its finalisation.”

When contacted, the SNGPL said the ECC in its Oct 27, 2021 meeting allocated pipeline capacity to Energas on the SNGPL network.

The gas supplier added that its Board of Directors in December 2021 accorded in-principle approval for the execution of Access Agreement with Energas and it was incorrect to lay the blame on them.

The SNGPL, after BOD’s approval, shared the final draft of the Access Agreement with Energas in January, 2022 and again in August, 2022 for their signatures. The Energas, however, did not sign the document and insisted on signing the Allocation Agreement only.

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