Presentation on Gas Infrastructure Projects LNG Outlook In Pakistan - - PowerPoint PPT Presentation

LNG Outlook In Pakistan PIP LNG Seminar January 11, 2016, Karachi, Pakistan.

Presentation on Gas Infrastructure Projects

Contents

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 PAKISTAN ENERGY MIX  PAKISTAN NATURAL GAS DEMAND & SUPPLY  GAS INFRASTRUCTURE PROJECTS

Pakistan Energy Mix

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Oil, 34.4% Gas, 46.8% Coal, 5.4% Electricity, 13%

“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.”

Gas Supply-Demand Gap Mitigation

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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:

1.

Incentivizing the exploration and production companies for enhanced domestic production;

2.

Import of gas through transnational pipelines as well as LNG in public as well as private sectors; and

3.

Rationalizing economic use of gas in various sectors through administrative (load management) and fiscal (gradual price rationalization) measures.

Gas Supply-Demand Gap Mitigation

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Infrastrucure Projects include:

1.

Turkmenistan-Afghanistan-Pakistan-India (TAPI) Gas Pipeline Project.

2.

North-South Gas Pipeline Project.

3.

Gwadar-Nawabshah Pipeline & LNG Terminal Project

4.

LNG Terminals

Gylkynish Gas Field

TURKMENISTAN IRAN AFGHANISTAN PAKISTAN

Herat Char Rah Kandahar Quetta Multan

Lahore

Fazilka Nawabshah Iran Shahr Asaluyeh Sulaimanke Iran Shahr to ‘Mile 250’= 250 Km to be completed Gwadar

North-South Gas Pipeline Segment- 1,200 MMSCFD

LNG Terminal 2 LNG Terminals

Projects Highlights

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Turkmenistan-Afghanistan-Pakistan-India Gas Pipeline Project

Gas Volume: 3.2 bcfd (Pakistan Share 1.325 bcfd) Estimated Cost: US $ 10 billion Implementation Philosophy:

• A consortium Company - TAPI Pipeline Company Limited

(TPCL) with ISGS as its founding shareholder has been 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 Implementation Philosophy:

• Under Government-to Government arrangement with Russia.
• Inter-Governmental Agreement between the Governments of

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.

Projects Highlights

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Gwadar –Nawabshah LNG Terminal and Pipeline Project

Gas Volume: 1.5 Bcfd Estimated Cost: US $ 2.5 billion Implementation Philosophy:

• 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

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.

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• As stated following projects are being pursued by MPNR

Liquefied Natural Gas (LNG)- Terminals

Name of Project Status Completion Capacity *Fast Track LNG Terminal at PQA Completed Mar 2015 400 MMCFD Second LNG Terminal at PQA Bidding process Mar 2017 600 MMCFD Gwadar Nawabshah LNG terminal & Pipeline G to G framework signed, Contract negotiation under process Dec 2017 600 MMCFD 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

• n April 30, 2014, and the first LNG based gas flowed into the system on March 26, 2015.

Tol

• lli

ling ng detai details

Year MMCFD MMBTU/ Capacity Charges Per Annum Utilization Charges 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

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. Detailed working of the tariff is as under;

Pakistan’s First LNG Terminal Commissioned on March 29, 2015 Handled 17 cargoes till date

Allied Benefits of Gas Import Projects

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 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

• vercoming 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

THANK YOU

BIDDING PROCESS (LNG Terminal)

Pre-Bid Meeting Bid Submission Advertisement Evaluation of Technical Proposals Technical Evaluation Announced Opening of Financial Bid Price Evaluation

August 2013 March 2014

Board Approvals LSA Negotiation Award of Contract Performance Bond Terminal Commissioning 335 days after signing

• f LSA

Fully compliant with PPRA rules and regulations

Allied Benefits of Gas Import Projects

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 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.