By Saad Hasan
KARACHI: Sui Southern Gas Company (SSGC) has submitted the pre-feasibility study on liquefied natural gas (LNG) import project for Economic Coordination Committee (ECC)’s final endorsement, Managing Director SSGC Munawar Baseer told The News.
Names of some of the top companies interested in carrying out the $400-500 million project had already been short-listed, he said without going into further details.
“The list includes (names of) all major companies. It is a good selection,” he said in a limited reference to the firms, which are willing to construct Pakistan’s first LNG terminal, re-gasification plant and related storage facilities.
LNG import that will augment gas supplies by 500 million standard cubic feet per day (mmscfd) is one of the options that the government is pursuing to meet gas demand-supply gap, which is expected to emerge in a year or two.
About the 700-page pre-feasibility report, Baseer said it covered all the aspects including LNG pricing, supply-demand situation, background of international market and project structure.
The ECC of federal cabinet is likely to approve the report in next few months as Oil and Gas Regulatory Authority (OGRA) has invited expressions of interest from consultants to review the project details.
SSGC has originally envisaged awarding the contract by January 2007, enabling the completion of required infrastructure by early 2010 when first LNG shipment is also expected.
During a visit to the utility’s upcoming installations, MD SSGC said additional 180-200 mmcfd of gas from Bhit and Zamzama gas fields would be supplied to Karachi by next June on completion of 24-inch 136km Karchat to Karachi pipeline. “Almost all the gas will be utilised by industrial consumers,” he said, adding later that high number of industrial consumers gave SSGC comparative advantage over Sui Northern Gas Pipelines Ltd (SNGPL).
Gas to residential consumers is highly subsidised and real incentive for transmission and distribution companies, like SSGC and SNGPL, is to increase the number of industrial and commercial customers.
On the impact of new tariff structure, he said it was not different than the previous formula based on rate of return on average net fixed assets.