Presentation on Gas Infrastructure Projects LNG Outlook In Pakistan PIP LNG Seminar January 11, 2016, Karachi, Pakistan.
Contents PAKISTAN ENERGY MIX PAKISTAN NATURAL GAS DEMAND & SUPPLY GAS INFRASTRUCTURE PROJECTS 2
Pakistan Energy Mix Electricity, 13% Oil, 34.4% Coal, 5.4% Gas, 46.8% “The economic growth of Pakistan demands higher energy inputs and indigenous oil and gas production is not enough to quench the energy thirst of the growing economy .” 3
Gas Supply-Demand Gap Mitigation Ministry of Petroleum and Natural Resources (MPNR) is pursuing a three-pronged strategy to abridge the widening gap between supply and demand of natural gas: Incentivizing the exploration and production companies for 1. enhanced domestic production; Import of gas through transnational pipelines as well as 2. LNG in public as well as private sectors; and Rationalizing economic use of gas in various sectors 3. through administrative (load management) and fiscal (gradual price rationalization) measures. 5
Gas Supply-Demand Gap Mitigation Infrastrucure Projects include: Turkmenistan-Afghanistan-Pakistan-India (TAPI) Gas 1. Pipeline Project. North-South Gas Pipeline Project. 2. Gwadar-Nawabshah Pipeline & LNG Terminal Project 3. LNG Terminals 4. 6
TURKMENISTAN Gylkynish Gas Field IRAN Herat AFGHANISTAN PAKISTAN Char Rah Lahore Kandahar Multan Quetta Sulaimanke Fazilka Asaluyeh Iran Shahr North-South Gas Nawabshah Pipeline Segment- Iran Shahr to 1,200 MMSCFD Gwadar ‘Mile 250’= 250 Km to be completed 2 LNG LNG Terminals Terminal
Projects Highlights Turkmenistan-Afghanistan-Pakistan-India Gas Pipeline Project Gas Volume: 3.2 bcfd (Pakistan Share 1.325 bcfd) Estimated Cost: US $ 10 billion • A consortium Company - TAPI Pipeline Company Limited (TPCL) with ISGS as its founding shareholder has been Implementation Philosophy: incorporated to take project implementation activities. • Tukmengaz is selected as Consortium Leader of TPCL. Expected Gas Flow: December 2019 North-South Gas Pipeline Project (LNG Pipeline) Gas Volume: 1.2 Bcfd Estimated Cost: US $ 2.5 billion • Under Government-to Government arrangement with Russia. • Inter-Governmental Agreement between the Governments of Implementation Philosophy: Pakistan and Russian on cooperation signed on 16th Oct. 2015. • ISGS is the nominated entity from Pakistan side responsible to execute the project. Expected Gas Flow: December 2017. 8
Projects Highlights Gwadar – Nawabshah LNG Terminal and Pipeline Project Gas Volume: 1.5 Bcfd Estimated Cost: US $ 2.5 billion • The project will serve as an Alternative Strategy for IP- Project. • Will be Implemented under G-to-G arrangement with China. • Framework Agreement signed on 20th April 2015 between NEA- China and MPNR-Pakistan. • China Petroleum Pipeline Bureau – CPPB is the nominated entity Implementation Philosophy: from Chinese side and ISGS from Pakistan side. • Pipeline System from Gwadar to Nawabshah is as already planned and designed under IP Project (about 700 km). • Remaining 80 Km along with additional required allied infrastructure are planned to be built through local EPC contractors when international sanctions on Iran are lifted . Expected Gas Flow: December 2017. 9
Liquefied Natural Gas (LNG)- Terminals • As stated following projects are being pursued by MPNR Name of Project Status Completion Capacity *Fast Track LNG Completed Mar 2015 400 MMCFD Terminal at PQA Second LNG Bidding process Mar 2017 600 MMCFD Terminal at PQA Gwadar Nawabshah G to G framework Dec 2017 600 MMCFD LNG terminal & signed, Contract Pipeline negotiation under process Cumulative Capacity of Terminals by 2017 1.7 BCFD * Pakistan’s private sector has built the world’s fastest LNG regasification terminal in a period of less than 11 months; the contract was signed after a completely transparent PPRA-compliant bid process on April 30, 2014, and the first LNG based gas flowed into the system on March 26, 2015. 10 10
Pakistan ’ s First LNG Terminal Tol olli ling ng detai details Commissioned on As per the financial bid, Capacity charges of US $ 272,00 for the first year and US $ 228,016/- and variable charge of US $ 0.06273 was quoted. March 29, 2015 Detailed working of the tariff is as under; Handled 17 cargoes till date Capacity Charges Per Utilization Charges Year MMCFD MMBTU/ Annum Per Annum Tolling Fee 1 200 69,400,000 94,550,213 4,353,462.00 1.4251 2 400 138,800,000 79,121,552 8,706,924.00 0.6328 3 400 138,800,000 79,121,552 8,706,924.00 0.6328 4 400 138,800,000 79,121,552 8,706,924.00 0.6328 5 400 138,800,000 79,121,552 8,706,924.00 0.6328 6 400 138,800,000 79,121,552 8,706,924.00 0.6328 7 400 138,800,000 79,121,552 8,706,924.00 0.6328 8 400 138,800,000 79,121,552 8,706,924.00 0.6328 9 400 138,800,000 79,121,552 8,706,924.00 0.6328 10 400 138,800,000 79,121,552 8,706,924.00 0.6328 11 400 138,800,000 79,121,552 8,706,924.00 0.6328 12 400 138,800,000 79,121,552 8,706,924.00 0.6328 13 400 138,800,000 79,121,552 8,706,924.00 0.6328 14 400 138,800,000 79,121,552 8,706,924.00 0.6328 15 400 138,800,000 79,121,552 8,706,924.00 0.6328 Total 2,012,600,000 1,202,251,941 126,250,398 Levelized tolling tariff (US$/MMBTU) 0.660
Allied Benefits of Gas Import Projects With the availability of about 4 Bcfd of Gas, these projects will help a great deal in meeting the energy requirements of the country’s economy. Will help to preserve declining indigenous gas reserves of Pakistan Support power generation capacity, which will help in overcoming the crippling power shortage crisis Displaces liquid fuels in power generation and consequently contributes to reduction of emission of green house gases The construction of pipeline will also create job opportunities in backward areas of Balochistan and Sindh. Pipeline infrastructure can serve as a Trunk lines for following of gas from Southern to Northern region of the country and reduce line losses. Transnational Pipeline projects shall also be instrumental by serving as a tool and starting point for regional harmony, establish a corridor for Economic Connectivity 12 12
THANK YOU
BIDDING PROCESS (LNG Terminal) Price Evaluation August 2013 Advertisement Board Approvals Pre-Bid Meeting LSA Negotiation Bid Submission Award of Contract Evaluation of Technical Proposals Performance Bond Technical Evaluation Announced 335 days after signing Opening of Financial Bid of LSA Terminal Commissioning March 2014 Fully compliant with PPRA rules and regulations
Allied Benefits of Gas Import Projects Transnational Pipeline projects shall also be instrumental by serving as a tool and starting point for regional harmony, establish a corridor for Economic Connectivity. Will be the first step towards establishing an energy corridor and can be connected to neighboring countries. Provides an infrastructure to stimulate further foreign investments like Roads, Railway etc. By serving as Energy Hub this will work as economic integration of the region and provides a foundation to facilitate regional economic growth and development. Pakistan can earn transit fee if the pipeline is extended to third country. An assured natural gas supply would attract new industry and boost economic diversity. 15 15
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