Plan finalised:LNG based 5,600MW Projects

Society Pakistan & World Affairs
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LNG price is Asian markets is down 50% from previous year … approx. $10/mmbtu. Its time to capitalize this sinking price trend

Plan finalised to set up 5,600MW projects

Khaleeq Kiani
Updated about 5 hours ago

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The government had already invited bids for 1,000MW onsite projects based on well-head (raw) gas and another 1,000MW projects based on local purified natural gas. — AFP/File

ISLAMABAD: The government finalised on Friday a plan to set up gas-based power projects in Sindh and Punjab of 5,600MW, with those in Hyderabad and Sukkur scheduled to start producing about 2,000MW by May this year.

The plan was firmed up at a meeting of a ministerial committee headed by Finance Minister Ishaq Dar and comprising Petroleum Minister Shahid Khaqan Abbasi and Water and Power Minister Khwaja Mohammad Asif.

The cabinet committee on energy headed by the prime minister had directed the ministerial committee to present the plan within a week for its approval and implementation.

A senior government official told Dawn that the plan would be submitted to the prime minister for formal approval by the cabinet committee, most probably on Monday.

He said the plan consisted of two stages. In the first stage, about 2,000MW would be generated through trailer-mounted small power projects of 20-50 MW in service areas of the Hyderabad Electric Supply Company and Sukkur Electric Power Company as a stop-gap arrangement for two to three years because of availability of gas for a short period. The projects are anticipated to minimise power shortage until 2017.

Under the two separate schemes, the government had already invited bids for 1,000 MW onsite projects based on well-head (raw) gas and another 1,000 MW projects based on local purified natural gas.

The last date for filing bids was Dec 31, but it was extended to Jan 15 because of Christmas holidays. In many cases, the defunct rental power projects would be rehired for a short-term period under a revised scheme on a take-and-pay basis and without any mobilisation advance or capacity payments. The bidding results will be on the basis of minimum tariff to be approved by the National Electric Power Regulatory Authority.

In the second stage, 3,600 MW power plants would be set up in Punjab’s load centres where transmission lines are already available. The projects will be based on imported liquefied natural gas (LNG).

These are in addition to eight coal-based power projects of 5,300 MW currently under process as part of the Pakistan-China Economic Corridor project – four in Thar, Sindh, and four in Punjab’s Muzaffargarh, Sahiwal, Rahimyar Khan and Chakwal. They are expected to start commercial production by 2017 or early 2018.

A power ministry official said the government was planning to set up **nine LNG-based power projects at three different sites — Balloki and Bhikki, near Lahore, and Haveli Bhadarjang, near Jhang.

**
According to sources, the Ministry of Petroleum and Natural Resources had promised to deliver about 500 million cubic feet per day of LNG by March 31 and subsequently ramp up supplies through a pipeline from Karachi to Lahore in three years.

To be offered for bidding by the Private Power and Infrastructure Board, the government plans to achieve financial close for the projects in six to seven months.

In the first phase, the projects would be open-cycle and completed in 18 months after the financial close to produce 2,400 MW in May 2017.

In the meanwhile, all these projects will be converted to closed cycle to add another 1,600MW, achieving a planned capacity of 3,600 MW by mid-2018.

An official statement said the meeting had reviewed salient features of the short- and long-term plans prepared by the power ministry to meet energy shortage as directed by the prime minister. Altogether, the measures would add up to 5,600MW to the national grid, it added.

The finance minister directed that besides power generation, proper transmission facilities should also be ensured. It was the foremost requirement for the success of both the short- and long-term measures, he added.
*

Published in Dawn, January 3rd, 2015*

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Re: Plan finalised:LNG based 5,600MW Projects

there is much more to imported LNG based gas plants than the price of gas...most importantly how will gas reach to the power plant?

first, you need to secure a long term gas supply agreement either from a NOC (qatar) or IOC (shell etc)....

secon, you need a partner who is willing to bear the cost of transporting the gas from source to a port terminal, put liquafication terminals in place to convent gas into liquid form and then ship this liquified gas in a LNG carrier to Pakistani port...

third, pakistani govt or its partner needs to put in place regasification terminals at the port to convert liquified gas back into gaseous form and then willing to put pipelin to transport gas to the desired power plant

fourth, govt needs an EPC (engineering, procurement, construction ) partner to design and build the gas power plant plus buy expensive gas turbine

firth, the govt needs to secure a viable power purchase contract from its partner as well as put appropriate transmission & distribution infrastructure to supply power to different areas of the country

On paper, all of this can achievable but from a practical perspective and given unsafe business conditions in pakistan, i doubt it will be easy to find financier and a partner but lets hope for the best

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Re: Plan finalised:LNG based 5,600MW Projects

officials in petroleum,water&power and planning ministries plus Engro Vopak must have worked out all EPC related details of importing LNG more likely from Qatar Gas. Power Plants EPC details yet to be finalized. Here is some detail

http://interfaxenergy.com/gasdaily/article/14102/with-one-lng-terminal-speeding-ahead-pakistan-aims-for-a-second

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Filling vacuum: Russia offers LNG export after two years

By Zafar Bhutta
Published: January 11, 2015

**ISLAMABAD: **Russia has offered Pakistan the export of liquefied natural gas (LNG) in a government-to-government contract to help tackle energy shortages in a proposal that reflects similar gas supply arrangements with other countries.

“Russia has told Pakistan that it is willing and ready to export LNG after two years,” an official told The Express Tribune. “Moscow has already inked energy deals with some countries and could create space for Islamabad in the next two years.”

The offer comes after the United States refused to enter into a state-to-state LNG supply deal with Pakistan.
The government desperately needs to tap vital sources of energy as domestic gas availability is expected to go down 50% from the current 4 billion cubic feet per day (bcfd) by 2020 because of a sharp fall in production from existing major fields.
Officials call the Russian offer encouraging at a time when the US has turned down the request for LNG export.

In an agreement with Russia, India is allowed to import 2.5 million tons of LNG through pipelines each year. Moscow is also supplying LNG to South Korea, charging a price of $8 per million British thermal units (mmbtu).
“Keeping in view the $8 price, there is a possibility for Pakistan to import LNG at a much cheaper rate,” the official remarked.
At present, LNG supplies can be sourced from Qatar and the government is trying to clinch a deal.

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“Qatar is ready to provide LNG on a fast-track basis whereas no other country is willing to export gas immediately,” the official said, adding the government was putting on efforts to finalise a contract with Doha.
Sui Southern Gas Company (SSGC) has already awarded a contract to Elengy Terminal Pakistan Limited for constructing an LNG terminal, which will start operations by March this year.

In meetings with officials of the previous Pakistan Peoples Party-led government, Qatar had offered to export LNG at a price equivalent to 14.7% of the Brent crude oil price, when it was hovering around $110 per barrel in the international market.

Later, Doha pushed the price down to $17.437 per mmbtu, a 0.5% discount over the previous rate of $18.002 for the 20-year lifetime of the project.

The price did not cover the capital cost of LNG terminal and its charges, import expenses, re-gasification, wastage and shipping costs. The additional costs would add about $2.084 per mmbtu to the quoted price.

Though the cabinet had given the go-ahead to SSGC to purchase LNG from Qatar, but it did not approve the offered price.
*

Published in The Express Tribune, January 11[SUP]th[/SUP], 2015.*

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Re: Plan finalised:LNG based 5,600MW Projects

at 8 dollars from russia, take it, take it, take it!

oh and our muslim brother qatar wants to sell it for $17.5…why am i not surprised

so do you want halal gas or haram gas?

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Re: Plan finalised:LNG based 5,600MW Projects

$17.5/mmbtu was in 2012 , now they are also around $12/mmbtu.

haram gas … my two cents … :k:

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Long-term LNG contract with Qatar likely

January 25, 2015
ABDUL RASHEED AZAD0 Comments
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Pakistan is likely to strike a long-term Liquefied Natural Gas (LNG) supply contract with Qatar at an estimated price based on current commodity rates in international market in the range of $8 to $10 per mmbtu, it is learnt. According to sources privy to the development, Federal Minister for Petroleum and Natural Resources, Shahid Khaqan Abbasi who has just returned from a visit to Qatar has summoned a high-level meeting of relevant stakeholders of the LNG project on January 26 (Monday) to discuss the terms and conditions of the final agreement with Qatar.

Sources said during his recent visit, Qatar had assured Pakistan of supplying sustainable LNG for 15 years at 13.5 percent of Brent and Pakistan presented two drafts of agreements - one long-tem and the other medium-term. During the visit, the two countries discussed Sales Purchase Agreement (SPA) for LNG and the minister will share the details of his talks with Qatari officials before making a presentation to the Prime Minister, the official maintained.

The ad hoc Managing Director Pakistan State Oil, who assumed the office less than a week ago and MD Inter State Gas Company, Hassan Mehmood, as well as a senior official of the Petroleum Ministry along with other officials, accompanied the Minister to Qatar to finalise Heads of Agreement (HoA) of LNG.

“As yet both the countries have not agreed on LNG price but it will be in the range of $8 to $10 per mmbtu. The Qatar government has assured Pakistan of supplying required quantity of LNG. Pakistan has addressed all the concerns of the Qatari government and they are ready to supply LNG,” the official stated. Pakistan is facing a massive demand/supply gap at present and the government intends to meet the gap through 2 Billion Cubic Feet per Day (BCFD) LNG imports by 2017.

The government of Pakistan on a fast-track basis wants to commence importing 400 Million Cubic Feet per Day (mmcfd) of LNG from Qatar for which a LNG terminal has reached its final stage at Port Qasim, Karachi with a capacity to handle a maximum of 600 mmcfd of the commodity. The official said that Malaysian LNG producer and supplier Petronas has also assured Pakistan of supplying 200 mmcfd of LNG per annum. He added that during a recent visit, the senior management of Petronas showed great interest in supplying 1.5 million tons LNG per annum.

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Re: Plan finalised:LNG based 5,600MW Projects

Nawaz Sharif: Party to banti hai.
Saif ur Rehman: abhi to party shuroo huwi hai.

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Pakistan speeds ahead to first Qatari LNG cargo

By Sara Stefanini
Posted 28 January 2015 11:45 GMT

http://interfaxenergy.com/gasdaily/uploads/articles/1422445516.jpg

Qatar will deliver the Commissioning cargo for Pakistan’s new LNG terminal. (Qatar Gas)

Pakistan’s new LNG terminal is on track to be completed by late next week and to receive its first cargo from Qatar in early March, according to the chief executive of the company charged with installing and maintaining the FSRU.

“We are doing pre-commissioning and other work, and it should be ready within the next week, maybe 10 days,” Engro Vopak Terminal’s Imran ul Haque told Interfax this week.

The company is a joint venture between Pakistani conglomerate Engro Corp. and the Netherlands’ Royal Vopak.

Qatar has already agreed to deliver a commissioning cargo in the first week of March, and is in the final stages of negotiating a long-term supply contract with national marketing company Pakistan State Oil, likely for 10 or 15 years, ul Haque added.

This will be Pakistan’s first supply of foreign gas, at a time when domestic production barely meets 50% of demand, according to the country’s Ministry of Finance.

If all goes as planned, the floating unit and associated infrastructure will have been installed in less than 10 months, marking a significant turnaround for a project that has been repeatedly delayed by corruption scandals and other setbacks

Engro’s contract with the government requires it to bring the FSRU onstream by 31 March – 335 days from the start of construction – after which it faces a penalty of $150,000 per day

The FSRU, leased from Excelerate Energy, has the capacity to store 151,000 cubic metres and import 3.5 mtpa, or **11.3 million cubic metres per day (MMcm/d) **– potentially cutting the country’s 45.3 MMcm/d shortfall by 25%, Engro has said.

Gas is Pakistan’s biggest power generation fuel, accounting for 49% of the mix in 2012-2013. Oil accounted for 31.3%, hydro 12.3%, coal 6.1% and nuclear 1.3%, according to government figures.

The Pakistani and Qatari governments reached a non-binding deal in November 2012 for the supply of 3.5 mtpa from** Qatargas**. But the talks have since been slow to progress, and were reportedly held up last year by the seller’s demand for a higher oil slope.

Pakistan?s Excelerate FSRU is approaching startup and speeding ahead to receive its first LNG cargo from Qatar - Natural Gas Daily - Interfax Global Energy

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Pakistan likely to receive first LNG cargo by month end

By Zafar Bhutta
Published: February 8, 2015

http://i1.tribune.com.pk/wp-content/uploads/2015/02/834726-LNGafpcopy-1423346286-730-640x480.jpg

The government has already announced that the CNG sector in Punjab will receive the first shipment of LNG in March this year from Qatar. PHOTO: AFP

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ISLAMABAD: **Qatar has assured Pakistan of the delivery of first liquefied natural gas (LNG) cargo by the end of the current month.

Earlier, both the countries had agreed on all the clauses of the contract including the volume and contract terms, official sources told The Express Tribune. However, the two sides have yet to decide on the price.

Once the country quotes its price for LNG, Prime Minister Nawaz Sharif will likely visit Doha in order to seek a discount from the king of Qatar.

Officials familiar with the development said Pakistan and Qatar had agreed on the supply of 400 million cubic feet of gas per day (mmcfd) this year. Earlier, Pakistan was supposed to import 200 mmcfd in the first year and 400 mmcfd in the second year. The two sides have also agreed on a 15-year supply contract.

During a meeting held on January 14, Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi asked Sui Southern Gas Company (SSGC) and Port Qasim Authority (PQA) to be ready in all respects by February 28 for receiving LNG supplies. He also advised Pakistan State Oil (PSO) managing director to give a window of the said period to Qatargas for the supply of commissioned cargo.

PSO MD said that a letter from Qatargas had been received for the cargo.

During the meeting, Elengy Terminal Pakistan Limited Chief Executive Officer Imran Sheikh said that the construction of the LNG terminal was in progress as per schedule. He said that the Floating Storage and Re-gasification Unit (FSRU) would be ready to pick LNG cargo for sellers by February 28 and would reach Karachi within two to three days.

It was informed during the meeting that since only six weeks were left in terminal commissioning, the LNG supply agreement needed to be expedited. It was also informed that LNG prices were linked to crude oil and in view of the prevailing low crude prices, Qatargas may demand a larger ratio.

It was also told that independent power plants (IPPs) and Kapco had been identified as LNG consumers and the CNG sector may be supplied LNG as an alternative buyer. Government plans to allocate 100 million cubic feet of LNG per day to the CNG stations of Punjab, which were shut down during the winter season for three months.

In a bid to address the woes of the CNG industry, the government has already announced that the sector in Punjab will receive the first shipment of LNG in March this year from Qatar.

LNG imports will provide a boost to the CNG industry and the country is likely to see a financial impact of Rs200 billion due to the usage of LNG in CNG stations. The CNG industry has invested Rs450 billion and the infrastructure is already available.

According to Petroleum Minister Abbasi, the government would give LNG to the CNG industry from its share as an interim arrangement, which would provide relief to the consumers while easing the pressure on petrol. It would also generate employment.
*Published in The Express Tribune, February 8[SUP]th[/SUP], 2015.

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Re: Plan finalised:LNG based 5,600MW Projects

^^ Good move,

I would appreciate if Govt can direct the gas to Industrial sector, specially the Ceramics and Fertilizer sector, where the ceramic industry can export its finished product, if i recall it correct, the ceramics export from Pakistan was nearly half a billion and it got hit from severe gas shortages in last era of Zardari.

I hope govt is looking into it and would prefer industry when it comes to the distribution of Gas and not CNG or domestic users.

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LNG demand: Brunei and China join race, show interest in gas export

By Zafar Bhutta
Published: February 13, 2015

http://i1.tribune.com.pk/wp-content/uploads/2015/02/837472-xcopy-1423765187-292-640x480.jpg

Offer multibillion-dollar deals for LNG supply to Pakistan. PHOTO: AFP

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ISLAMABAD: **Seeing a handsome opportunity to cash in on Pakistan’s growing energy appetite, state-owned energy companies of Brunei Darussalam and China have offered multibillion-dollar deals for the supply of liquefied natural gas (LNG) in a government-to-government contract.

Separately, Pakistan is close to sealing an LNG import agreement with gas-rich Qatar to bridge the widening gap between demand and supply of energy.

According to officials familiar with the development, PB Trading Sendirian Berhad, a wholly-owned subsidiary of Brunei National Petroleum Company Sendirian Berhad also known as Petroleum Brunei, a national oil company, and Petro China, one of China’s largest petroleum companies, have expressed interest in exporting LNG to Pakistan.

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In addition to these, officials said, Pakistan would explore the possibility of importing LNG from countries like Australia, Nigeria, Indonesia, Algeria, Russia and Oman, which are exporting gas to many countries of the world.

Malaysian firm Petronas and Russia also aspire to supply LNG to Pakistan in a government-to-government arrangement. However, they have made it clear that they will be able to provide gas only after two years.

In this scenario, the only choice for Pakistan is to go for LNG purchases from Qatar. It has finalised all contract provisions with Qatar except for the price and expects to see first consignment arrive by the end of the current month.

In another major project, the government is going to award a $3-billion Gwadar LNG pipeline and terminal contract to a Chinese company, which will serve as an alternative to the Iran-Pakistan (IP) gas pipeline project.

Pakistan has already missed the deadline for receiving the first flow of gas from Iran at the end of December 2014.

Officials point out that Oman and Iran have inked a gas pipeline accord and Muscat will also build an LNG terminal for handling supplies. In an extended arrangement, they suggest, Pakistan could also get Iranian gas through Oman in the form of LNG, which would be shipped to Gwadar.

Russia has signed an initial deal with Pakistan in the form of a protocol for laying an LNG pipeline from Karachi to Lahore. This has sparked hope that Pakistan will start receiving gas from Moscow after two years.
The gap between demand and supply of natural gas in the country has widened to 2 billion cubic feet per day (bcfd) with supplies at 4bcfd.

To bridge the shortfall, the Ministry of Petroleum and Natural Resources is pushing ahead with different gas pipeline projects. In addition to these, LNG terminals will be built at the Port Qasim and Gwadar Port, which will handle imported gas with an estimated re-gasification capacity equal to around 2bcfd of natural gas.
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Published in The Express Tribune, February 13[SUP]th[/SUP], 2015.*

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Is there any makroo gas? (i.e. from Iran) I'll go with that...

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Pakistan Close to Deal for LNG Supplies From Qatar for Power Plants - WSJ

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When we actually see how much it costs us and if this actually happens in the next year or so, then I will jump for joy. Until then its the standard PML (N) bull****.

Empty promises with nothing to show in reality.

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      **[Pakistan finalises $21b LNG deal with Qatar](http://tribune.com.pk/story/841333/pakistan-finalises-21b-lng-deal-with-qatar/)**

By Zafar Bhutta
Published: February 20, 2015

http://i1.tribune.com.pk/wp-content/uploads/2015/02/841333-LNGx-1424414347-598-640x480.JPG

The government has not clarified what the pricing formula is, though LNG contracts are typically priced at a 10-15% discount to Brent, the global benchmark of crude oil. PHOTO: FILE

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ISLAMABAD: ** In a major breakthrough, Pakistan has managed to secure a $21 billion long-term contract from Qatar to supply liquefied natural gas (LNG) at a highly attractive price, a move that is likely to help alleviate some of the severe, chronic shortages of natural gas in the country.

Under the terms of the agreement, Qatar will supply Pakistan with 500 million cubic feet per day (mmcfd) of LNG under a pricing formula that translates to a current price of LNG of $7 per million British thermal units (mmbtu), a price lower than that paid even by Indian importers, who are currently paying close to $9-$10 per mmbtu.

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The government has not clarified what the pricing formula is, though LNG contracts are typically priced at a 10-15% discount to Brent, the global benchmark of crude oil. The price does not include the cost of shipping the LNG to Karachi, which can be substantial.

While the new deal is likely to be a welcome injection of supply into the national gas grid, it will not come close to solving the overall natural gas shortages which have crippled large parts of the economy. Pakistan’s total production of natural gas is currently close to 4,000 mmcfd, while demand is closer to 6,000 mmcfd. The 500 mmcfd from Qatar would, therefore, only fill about a quarter of the current shortfall.

The $7 per mmbtu price, while attractive relative to where the overall LNG market stands, is still more expensive than the $5 per mmbtu the government would currently have been paying had the Iran-Pakistan gas pipeline been fully built and operationalised by now. Price differences between LNG imports and pipeline gas are natural: the price of the LNG includes the cost of chilling it down to minus 170 degrees Celsius, whereas pipeline gas does not have that cost.

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The United States has been pressuring Pakistan to import LNG from Qatar, even though gas from Iran would be cheaper because Washington wants to sustain sanctions pressure against Tehran in order to dissuade it from developing nuclear weapons. Several US and European oil companies also have a presence in the Qatar petroleum and natural gas industry.

At a meeting of the Cabinet Committee on Energy on February 12, Prime Minister Nawaz Sharif had been informed that the agreement with Qatar Gas had been finalised and that the price was set at a level lower than the ones paid by other countries in the region. Other countries had also expressed an interest in supplying LNG to Pakistan, but Qatar is the closest large supplier, which would reduce shipping costs significantly.

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The LNG import terminal at Port Qasim, being constructed by Engro Elengy, a subsidiary of the Engro Corporation, is expected to be completed by March 10, ahead of its March 31 contractual deadline. Two ships carrying 50,000 tons of LNG are expected to then start arriving at Port Qasim each month initially, a pace that would slowly be increased to four ships a month.

Meanwhile, the petroleum ministry is negotiating with the industry association of Compressed Natural Gas (CNG) retailers for the sale of the first shipment.

Given the precarious finances of the energy sector, particularly with respect to the power sector, the government has tried to create a mechanism that would ensure a smooth flow of payments to LNG suppliers. At current prices, each LNG shipment would cost $30 million, which would be paid directly by the finance ministry to Pakistan State Oil, the importing entity, which would then pay Qatar Gas. The payments the finance ministry makes would be deducted from the subsidy payments it owes to independent power producer (IPPs).

The IPPs would be required to provide standby letters of credit of between $20 million and $60 million and an operative letter of credit for one months’ supply of gas utilisation of $10 million to $30 million to PSO.

Published in The Express Tribune, February 20[SUP]th[/SUP], 2015.

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200mmcfd in 1st year to 1.5m ton/annum: Govt committed to import LNG as first shipment on 26th March, says Abbasi

Reported by: `Customs Today Report](http://customstoday.com.pk/author/shahzad/)March 14, 2015

ISLAMABAD: Federal Petroleum Minister Shahid Khaqan Abbasi has reiterated that the first shipment of imported liquefied natural gas (LNG) will likely to reach Karachi on March 26.

While talking to media on the occasion of awarding oil and gas exploration block to Kuwait Petroleum Exploration Co on strategic basis, the minister said that the government is committed to meet the deadline of importing LNG from Qatar by March 31.

Abbasi said that long-term LNG supply contract with Qatar had been finalized and Pakistan would be receiving 200 million cubic feet per day (mmcfd) in first year which amounts to 1.5 million ton per year. He said that LNG would be 14 per cent cheaper compared to LSFO and 40 per cent cheaper than furnace oil.

Meanwhile, an agreement was signed between Kuwait State owned Petroleum Exploration Co and government of Pakistan to award block to the latter. Kuwait Petroleum will do exploration in a block 3170-50 Paharpur over an area of 2260.70 sq km located in Dera Ismail Khan with firm commitment of $9.5 million investment.

The company has committed to spend $30,000 per year in the block on social welfare schemes. Sheikh Nawaf Saud Al-Sabah, the chief executive officer of KUFPEC said that they were working with dedication due to investment friendly environment in Pakistan. He said that Pakistan was rich in oil and gas resources and provides lot of opportunities for investment in upstream sector.