Dutch tank storage company Royal Vopak is all set to take stake in an LNG import facility in Pakistan through a transaction with Pakistani conglomerate Engro.
Image: Royal Vopak to acquire stake in LNG import facility in Pakistan. Photo: courtesy of Koninklijke Vopak NV.
In this regard, Royal Vopak has agreed to buy a stake of 29% stake in Elengy Terminal Pakistan (ETPL) from Engro. ETPL’s wholly-owned subsidiary Engro Elengy Terminal (EETPL) owns the LNG import facility, which is located in Port Qasim, near the Engro Vopak chemical terminal.
Financial terms of the acquisition were not disclosed.
The LNG import facility was built at an estimated investment of $300m and has an installed capacity to store 600 million cubic feet of LNG a day, reported The Express Tribune.
Royal Vopak executive board chairman and CEO Eelco Hoekstra said: “We very much look forward to further build, inside and outside of Pakistan, on our excellent partnership with Engro.
“This new step in our cooperation gives Vopak an excellent entry in the growing Pakistan LNG market. This fits very well our ambitions to grow and diversify our service offering in LNG.”
The facility, which has been operating since 2015, is the first LNG import facility in the Asian country. It is made up of an LNG jetty including a 7.5km high-pressure gas pipeline which is connected to the grid of EETPL’s customer Sui Southern Gas.
EETPL holds a 15-year floating storage and regasification unit (FSRU) time charter.
Under long-term contracts, the liquified gas is delivered through LNG carriers from exporting countries to the FSRU, which is moored to the EETPL jetty and linked to its pipeline.
The regasification is carried out on the FSRU and the gas is transferred to the mainland where it enters the grid of the customer under high pressure.
Following the closing of the deal, the owners of ETPL and the Pakistani LNG import facility will be Engro, Vopak and the International Finance Corporation.
Engro president and CEO Ghias Khan said: “We’re excited to enter into this mutually beneficial partnership with Royal Vopak which will allow Vopak to realise their strategy of entering the Pakistan energy market and will pave the way for Engro and Vopak to collaborate in further ventures at home and abroad using their combined resources and expertise.
“Engro has always endeavored to bring the best of the world to Pakistan because we recognize that developing markets require FDI in infrastructure and projects to remain on a path of progress.”
The transaction will be based on meeting of certain conditions, including customary regulatory and shareholder approvals, following which it is expected to be completed in the fourth quarter of 2018.