ADB Okays $30mln for Pak LNG Terminal
The Asian Development Bank (ADB) has approved a $30 million project loan to Engro Elengy Terminal Private Limited, a special purpose company which will build Pakistan’s first liquefied natural gas (LNG) regasification terminal at the Port Qasim.
Besides the ADB, the International Finance Corporation is likely to provide $20 million and local banks another $50 million. The rest of the project financing will come from equity proceeds of $33.3 million, for a total cost of $133.3 million, including contingencies.
The $30 million loan is to be used to build and operate the regasification facility. The fuel, suitable for use at most of the country’s combi¬ned cycle power plants, will be supplied to the state-owned Sui Southern Gas Comp¬any’s distribution network via a new high pressure pipeline.
The plant will start regasification of up to 3 million tonnes of imported LNG from next month. The loan is to be used to build and operate the regasification facility.
The regasification project is expected to set legal and financial benchmarks for similar projects in future, ADB says.
Regasification converts LNG into natural gas, making it easier to store and distribute through pipelines to end users including power generators. The project will help avoid up to 2 million tonnes of greenhouse gas emissions a year.
“Pakistan urgently needs to utilise its existing power generation capacity fully, while reducing its reliance on costly imported diesel for electricity generation,” said Mohammed Azim Hashimi, an investment specialist in ADB’s Private Sector Operations Department.