SSGC to Build Rs 65 Billion LNG Pipeline Between Karachi & Lahore

Sui Southern Gas Co. (SSGC) has planned a pipeline at an estimated cost of Rs 64.9 billion from Karachi to Lahore mainly to ensure supplies of Liquefied Natural Gas (LNG).

This pipeline project will be part of 3rd Re-gasification (RLNG III) Project to be completed by end of October 2018 as decided by board of directors in a recent meeting.

The Government of Pakistan wants to arrange for another 1.2 BCFD LNG for upcoming LNG terminals in the country. This is keeping in view the diminishing indigenous gas supply resources for meeting the increasing gas demand of all sectors, for which there is an immediate need of 1.2 BCFD pipeline capacity from Karachi to Lahore.

According to the summary released in a stock filing, SSG BoDs conceptually approved a capital intensive project for the development of additional 1.2 BCFD capacity pipeline from CTS Bin Qasim to CTS Sawan. The pipeline will be 42″ diameter x 339 Km and 48″ diameter x 31 Km with the total length being 370 Km (from CTS Bin Qasim to CTS Sawan) with 48000HP compression.

This project will require approval by the regulator i.e. Oil and Gas Regulatory Authority (OGRA); Economic Coordination Committee (ECC) and any other Competent authority of the Federal Government.

Further, the project execution needs availability of Letter of Comfort from Ministry of Petroleum and Natural Resources (MPNR) about availability of RLNG terminal facility for regasification up to 1.2 BCFD.

The pipeline project needs the arrangement of financing through long term loan from Federal Government or through commercial borrowing backed by a sovereign guarantee by the Federal Government including waiver of existing loan covenants from concerned quarters.

Scope of LNG Business in Pakistan

The third LNG terminal worth $200 million to $300 million would become operational in 2018 at Port Qasim, Karachi, taking the total installed capacity close to 2,000 million cubic feet per day.

According to reports, Pakistan is aggressively pursuing the import of liquefied natural gas (LNG) as its second terminal called Pakistan LNG Terminal Limited is expected to start operations in 2017 at Port Qasim with an install capacity of 600mmcfd.

Moreover, the petroleum ministry is working on proposals for the construction of five more terminals at the Gwadar and Karachi ports for handling, regasification, storage, treatment and processing of 3,000 million cubic feet per day of liquefied natural gas (LNG) it plans to import by 2018.

The first LNG import terminal in operation was established by Engro’s Elengy Terminal Pakistan Limited. It has an installed capacity of 600mmcfd.