LNG Outlook In Pakistan
PIP LNG Seminar
January 11, 2016, Karachi, Pakistan.
Presentation on
Gas Infrastructure Projects
Contents
2
PAKISTAN ENERGY MIX
PAKISTAN NATURAL GAS DEMAND & SUPPLY
GAS INFRASTRUCTURE PROJECTS
Pakistan Energy Mix
3
Oil, 34.4%
Gas, 46.8%
Coal, 5.4%
Electricity, 13%
“The economic growth of Pakistan demands higher
energy inputs and indigenous oil and gas production is
not enough to quench the energy thirst of the growing
economy.”
Gas Supply-Demand Gap Mitigation
5
Ministry of Petroleum and Natural Resources (MPNR) is
pursuing a three-pronged strategy to abridge the widening gap
between supply and demand of natural gas:
1. Incentivizing the exploration and production companies for
enhanced domestic production;
2. Import of gas through transnational pipelines as well as
LNG in public as well as private sectors; and
3. Rationalizing economic use of gas in various sectors
through administrative (load management) and fiscal
(gradual price rationalization) measures.
Gas Supply-Demand Gap Mitigation
6
Infrastrucure Projects include:
1. Turkmenistan-Afghanistan-Pakistan-India (TAPI) Gas
Pipeline Project.
2. North-South Gas Pipeline Project.
3. Gwadar-Nawabshah Pipeline & LNG Terminal Project
4. LNG Terminals
Gylkynish
Gas Field
TURKMENISTAN
IRAN
AFGHANISTAN
PAKISTAN
Herat
Char Rah
Kandahar
Quetta
Multan
Lahore
Fazilka
Nawabshah
Iran Shahr Asaluyeh
Sulaimanke
Iran Shahr to
‘Mile 250’= 250 Km
to be completed
Gwadar
North-South Gas
Pipeline
Segment-
1,200 MMSCFD
LNG
Terminal
2 LNG
Terminals
Projects Highlights
8
Turkmenistan-Afghanistan-Pakistan-India Gas Pipeline Project
Gas Volume: 3.2 bcfd (Pakistan Share 1.325 bcfd)
Estimated Cost: US $ 10 billion
Implementation Philosophy:
• A consortium Company - TAPI Pipeline Company Limited
(TPCL) with ISGS as its founding shareholder has been
incorporated to take project implementation activities.
• Tukmengaz is selected as Consortium Leader of TPCL.
Expected Gas Flow: December 2019
North-South Gas Pipeline Project (LNG Pipeline)
Gas Volume: 1.2 Bcfd
Estimated Cost: US $ 2.5 billion
Implementation Philosophy:
• Under Government-to Government arrangement with Russia.
• Inter-Governmental Agreement between the Governments of
Pakistan and Russian on cooperation signed on 16th Oct. 2015.
• ISGS is the nominated entity from Pakistan side responsible to
execute the project.
Expected Gas Flow: December 2017.
Projects Highlights
9
Gwadar –Nawabshah LNG Terminal and Pipeline Project
Gas Volume: 1.5 Bcfd
Estimated Cost: US $ 2.5 billion
Implementation Philosophy:
• The project will serve as an Alternative Strategy for IP- Project.
• Will be Implemented under G-to-G arrangement with China.
• Framework Agreement signed on 20th April 2015 between NEA-
China and MPNR-Pakistan.
• China Petroleum Pipeline Bureau –CPPB is the nominated entity
from Chinese side and ISGS from Pakistan side.
• Pipeline System from Gwadar to Nawabshah is as already
planned and designed under IP Project (about 700 km).
• Remaining 80 Km along with additional required allied
infrastructure are planned to be built through local EPC
contractors when international sanctions on Iran are lifted .
Expected Gas Flow: December 2017.
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• As stated following projects are being pursued by MPNR
Liquefied Natural Gas (LNG)- Terminals
Name of Project Status Completion Capacity
*Fast Track LNG
Terminal at PQA
Completed
Mar 2015
400 MMCFD
Second LNG
Terminal at PQA
Bidding process
Mar 2017
600 MMCFD
Gwadar Nawabshah
LNG terminal &
Pipeline
G to G framework
signed, Contract
negotiation under
process
Dec 2017
600 MMCFD
Cumulative Capacity of Terminals by 2017 1.7 BCFD
*Pakistan’s private sector has built the world’s fastest LNG regasification terminal in a period of less
than 11 months; the contract was signed after a completely transparent PPRA-compliant bid process
on April 30, 2014, and the first LNG based gas flowed into the system on March 26, 2015.
Tolling details
Year MMCFD MMBTU/ Capacity Charges Per
Annum Utilization Charges
Per Annum Tolling Fee 1 200 69,400,000 94,550,213 4,353,462.00 1.4251
2 400 138,800,000 79,121,552 8,706,924.00 0.6328
3 400 138,800,000 79,121,552 8,706,924.00 0.6328
4 400 138,800,000 79,121,552 8,706,924.00 0.6328
5 400 138,800,000 79,121,552 8,706,924.00 0.6328
6 400 138,800,000 79,121,552 8,706,924.00 0.6328
7 400 138,800,000 79,121,552 8,706,924.00 0.6328
8 400 138,800,000 79,121,552 8,706,924.00 0.6328
9 400 138,800,000 79,121,552 8,706,924.00 0.6328
10 400 138,800,000 79,121,552 8,706,924.00 0.6328
11 400 138,800,000 79,121,552 8,706,924.00 0.6328
12 400 138,800,000 79,121,552 8,706,924.00 0.6328
13 400 138,800,000 79,121,552 8,706,924.00 0.6328
14 400 138,800,000 79,121,552 8,706,924.00 0.6328
15 400 138,800,000 79,121,552 8,706,924.00 0.6328
Total 2,012,600,000 1,202,251,941 126,250,398
Levelized tolling tariff (US$/MMBTU) 0.660
As per the financial bid, Capacity charges of US $ 272,00 for the first year
and US $ 228,016/- and variable charge of US $ 0.06273 was quoted.
Detailed working of the tariff is as under;
Pakistan’s First LNG Terminal
Commissioned on
March 29, 2015
Handled 17 cargoes till date
Allied Benefits of Gas Import Projects
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With the availability of about 4 Bcfd of Gas, these projects will help a great deal in meeting the energy requirements of the country’s economy.
Will help to preserve declining indigenous gas reserves of Pakistan
Support power generation capacity, which will help in overcoming the crippling power shortage crisis
Displaces liquid fuels in power generation and consequently contributes to reduction of emission of green house gases
The construction of pipeline will also create job opportunities in backward areas of Balochistan and Sindh.
Pipeline infrastructure can serve as a Trunk lines for following of gas from Southern to Northern region of the country and reduce line losses.
Transnational Pipeline projects shall also be instrumental by serving as a tool and starting point for regional harmony, establish a corridor for Economic Connectivity
THANK YOU
BIDDING PROCESS (LNG Terminal)
Pre-Bid Meeting
Bid Submission
Advertisement
Evaluation of Technical Proposals
Technical Evaluation Announced
Opening of Financial Bid
Price Evaluation August 2013
March 2014
Board Approvals
LSA Negotiation
Award of Contract
Performance Bond
Terminal
Commissioning
335 days
after signing
of LSA
Fully compliant with PPRA rules and regulations
Allied Benefits of Gas Import Projects
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Transnational Pipeline projects shall also be instrumental by serving as a tool and starting point for regional harmony, establish a corridor for Economic Connectivity.
Will be the first step towards establishing an energy corridor and can be connected to neighboring countries.
Provides an infrastructure to stimulate further foreign investments like Roads, Railway etc.
By serving as Energy Hub this will work as economic integration of the region and provides a foundation to facilitate regional economic growth and development.
Pakistan can earn transit fee if the pipeline is extended to third country.
An assured natural gas supply would attract new industry and boost economic diversity.