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Govt Puts Off Bidding For LNG Terminal Land

Government adjourned the competitive bidding process to allot land for construction of new liquefied natural gas (LNG) terminal and rather decided for an allotment on first-come, first-served basis, sources said on Monday.

The well-placed sources said the government took the decision after the Economic Coordination Committee (ECC) of the cabinet advised the Port Qasim Authority (PQA) to switch from the competitive bidding criteria.

The ECC, in its last meeting, asked the PQA to allot lands to LNG terminal operators on first-come, first-served basis. In February, PQA invited bids for allocation of site-B for establishment of LNG terminal at the Port Qasim.

The PQA board intended to allocate site in “fair, transparent and competitive manner” through invitation of sealed bids from the interested consortia including Elengy Terminal Pakistan and Energas Terminal Pvt Ltd. Both the groups were eager for development of the terminal at the site-B due to a number of reasons including cost advantage.

In March, PQA had adjourned the bidding for the site as per the instructions of ministry of maritime affairs as the site-B was declared unsafe for being in close proximity to the main navigation channel and located at the mouth near the bend of alternate channel, the sources added.

The ECC also directed the Port Qasim Authority to forego the site-B and not to consider it as an option in future. Alternatively, three ‘safer and suitable sites’ (A, C and D) in the quarantine risk assessment in the alternate channel (LNG Zone) were identified for new LNG setups.

The sources said the authority favours bidding process, which is globally known as more transparent process. However, it was told to adopt cost-plus method. The ECC also directed the PQA to rationalise period for establishing of LNG terminal from the existing 18 months.

The country has two liquefied natural gas terminals with a combined re-gasification capacity of 1.2 billion cubic feet per day. With a population of more than 200 million and economic growth of five percent plus, the country has a growing appetite for liquefied natural gas imports, which are expected to climb fivefold to 30 million tons a year by 2022 from the existing seven million tons a year.

Re-gasified LNG- (RLNG) based power generation currently occupies more than one-fourth in the country’s total energy mix — the largest share after the hydropower generation. Re-gasified liquefied natural gas share in power generation increased to 25.59 percent in July from 12.12 percent in the corresponding month a year earlier, while share of residual fuel oil decreased to 9.34 percent from 25.59 percent during the period, the latest Central Power Purchasing Agency’s data showed

  • ECC
  • Government
  • LNG Terminal
  • Bidding