ISLAMABAD: The Sui Southern Company Limited (SSGCL) has awarded the contract of second LNG terminal to Akbar Associates who offered the lowest tariff of 49.87 cent per Million British Thermal Unit (mmbtu) for the LNG terminal.
Akbar Associates Friday emerged as successful bidder for second LNG terminal by floating the lowest tariff. The SSGC had short listed two bidders for Pakistan’s second LNG import terminal which included Pakistan Gas Port Limited and Akbar Associates on Thursday.
Pakistan Gas Port Limited (PGPL) and Gunvor had obtained 89.3 marks from SSGC’s consultants, AF Capital, and Akbar Associates received 74.73 marks. Both bidders have been declared technically qualified and have progressed to the final round of the bidding process.
Engro’s Elengy Terminal Pakistan Limited (ETPL), which commissioned the country’s first LNG terminal in March, obtained 61.9 marks and did not qualify as bidders were required to receive at least 70 marks in order to qualify.
According to officials familiar with the development, during opening of financial bid on Friday, Akbar Associates offered 49.87 cent per Million British Thermal Unit (mmbtu) whereas tariff quoted by Pakistan Gas Port was 52.9 cents per mmbtu. PGPL, Akbar Associates, and ETPL had submitted their bids on Jan 27. The levelled tariff for ETPL’s LNG terminal is US 66 cents/mmbtu.
Now this bid revealed the tariff quoted by ETPL for first LNG terminal was much higher at 66 cents as a single party in financial party and no competition was made. It has also revealed the fact that country could have better tariff if there would have been competition in awarding of first LNG terminal contract to ETPL.
Now the successful bidder Akbar Associates will be required to commission the project within 24 months and make 400 mmscfd capacity available to SSGC. Like ETPL, PGPL has proposed establishing an FSRU-based project while Akbar Associates seeks to set up a land-based terminal.
The ETPL terminal and the new terminal will together reduce the summer deficit of natural gas by 53 percent and the winter deficit by 36 percent.
In addition, the federal government plans to start the process for the setting up of a land-based LNG import terminal at Gwadar with Chinese assistance.
