US-backed consortium proposes $4.4bn LNG terminal and 1,100km pipeline for Pakistan at Port Qasim
A consortium of US companies backed by the Trump administration has proposed a $4.4 billion integrated LNG project for Pakistan, starting with a $1.7 billion terminal and storage facility at Port Qasim and followed by a 1,100-kilometre pipeline to carry gas upcountry.
A private consortium of US companies, backed by the Trump administration, has proposed investing up to 4.4 billion dollars in an integrated liquefied natural gas project in Pakistan, covering imports, storage, re-gasification, transmission and sales to large consumers, according to a proposal reported by Dawn on Monday.
The plan would give Pakistan its first large, dedicated LNG storage facility, filling a gap that has left the country's gas supplies entirely dependent on import schedules and international prices. At present Pakistan has no LNG storage of its own, a vulnerability exposed by recent disruptions to shipping through the Strait of Hormuz and by volatility in world energy markets.
The consortium is led by Global Vision Energy Partners and Khanjee Holdings, two related firms, together with General Mediterranean Holding, a Luxembourg-based US financial conglomerate, and strategic co-investors from other countries. The sponsors say they have secured consent from the Port Qasim Authority for the project site and have filed an application with the Oil and Gas Regulatory Authority, known as Ogra, for a provisional licence.
The project is planned in two phases. The first, costed at 1.7 billion dollars, would build an LNG import, storage and re-gasification terminal at Port Qasim, near Karachi, with four tanks of 140,000 cubic metres each, giving combined storage of 560,000 cubic metres and an annual throughput of about 35 billion cubic feet.
The second phase would lay a 1,100-kilometre pipeline, 42 to 48 inches in diameter, to carry about 1.2 billion cubic feet of gas a day from the coast to consumers upcountry, taking the total project cost to 4.4 billion dollars. The sponsors favour Port Qasim for its existing port infrastructure and for its position outside the Strait of Hormuz, and they want the project to serve as a storage and trading hub for US and Middle Eastern suppliers.
Under the proposal, the project would operate on a merchant basis, selling gas directly to large consumers rather than relying on a single guaranteed state buyer. The proposed charges are 4.93 dollars per million British thermal units for terminal and storage and 1.91 dollars for transmission over the first decade, falling to 2.20 dollars and 0.92 dollars respectively afterwards, although Ogra has not approved any of these figures.
Financing is planned on a 70 to 30 debt-to-equity basis. The reported equity split gives Global Vision Energy Partners 26 per cent, General Mediterranean Holding 24 per cent, and Khanjee Holdings and strategic co-investors 20 per cent each, with local investors sought for up to 10 per cent. The project has been approved for consideration under the US Trade and Development Agency's project preparation programme, and it could receive partial financing from the US Development Finance Corporation, with export credit guarantees from the US Export-Import Bank for equipment, technology and services.
The sponsors have named major names as possible co-investors, including KKR, Blackstone, Grey Rock Investment Partners, Saudi Arabia's Public Investment Fund and the Kuwait Investment Authority. None of them has made a binding commitment, and participation by any of them remains subject to due diligence, investment approvals and definitive agreements, a point the reporting stresses repeatedly.
The proposal follows the withdrawal of Energas, a venture involving the Lucky Group and QatarEnergy that had been the frontrunner for a similar LNG terminal at Port Qasim, after changes in Pakistan's energy policies and requirements and unresolved regulatory and fiscal issues. The new consortium is, in effect, stepping into the space left by that abandoned project, at a moment when Pakistan's energy planners are again looking for private capital to shore up gas supplies.
What happens next depends on regulators and financiers rather than on the announcement itself. Ogra must consider the provisional licence application, the project must pass due diligence and secure binding equity and debt, and the sponsors must show that their tariff proposal can work for both investors and consumers. If it proceeds, the terminal would be Pakistan's first buffer against supply shocks; if it stalls, it would join a long line of ambitious energy proposals that never moved beyond the proposal stage.
More in Pakistan News
PakistanLahore High Court seeks reports on extended detention of Imran Khan’s sisters and Noreen Niazi’s health
PakistanPakistan’s revised petrol pricing forces refineries to surrender war-time premium, giving consumers Rs14.71 a litre relief
Pakistan