ECC okays construction of second LNG terminal

ISLAMABAD: After establishing a committee to resolve the litigation issues, the ECC, under the chairmanship of the Finance Minister Ishaq Dar, has accorded approval for the setting up of subsidiaries for the import of liquefied natural gas (LNG) and construction of a second LNG terminal.

The Economic Coordination Committee (ECC) of the Cabinet, which met with the finance minister in the chair, also set up a committee to review the legal requirements on the issue of construction of a second LNG terminal in order to minimise the gas shortfall through imports.

The ECC also approved the proposals of the Ministry of Water and Power to allow the Water and Power Development Authority (Wapda) to raise commercial financing of Rs144 billion for the Dasu-I project, and Rs100 billion for Neelum-Jhelum Hydropower Project from local banks through conventional/Islamic mode of financing under government guarantees.

According to the summary moved by the Ministry of Petroleum and Natural Resources before the ECC, Pakistan is currently facing a severe shortage of natural gas both for its electricity generation plants and for general use by all sectors.

The domestic gas production of 4,000 MMCFD is unable to meet demands and the supply-demand gap is approximately 2,000 MMCFD and keeps on rising. It is not only causing hardships for public but also hindering the country’s growth. Therefore, the government is pursuing import of LNG to minimise the gas shortfall.

In order to mitigate the huge demand-supply gap, the Sui Southern Gas Company Limited (SSGC) started a bidding process for the second LNG terminal in October 2014; however, one party in the bidding process i.e. Pakistan Gasport went to the Sindh High Court (SHC) on the plea that the winning party, Akbar Associates Pvt Limited, had not submitted legal documents. The SHC had ordered to cancel the process.


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