The Pakistani government has granted approval to the Netherlands-based 4Gas to establish a floating liquefied natural gas (LNG) terminal at Port Qasim.
The Floating Re-gasification Supply Unit (FRSU) will be operational for five years. After that a fixed terminal would be established to accommodate long-term imports of LNG in Pakistan.
While the rent of the FRSU is up to $200 million (144 million) a year, the cost of a land-based terminal is between $700 million and $800 million, Minister for Petroleum and Natural Resources Naveed Qamar says.
The government would provide sovereign guarantees to the LNG suppliers. The FRSU would have the capacity to handle 3.5 million tonnes of LNG, which amounts to 500 mmcfd of natural gas, while the capacity of land-based terminal would be higher.
Apart from the arrangements to be made by the terminal operator, the SSGC has to establish pipelines and other infrastructure at the selected point at Port Qasim to transfer imported gas to its main system.
The government is negotiating prices with the GDF-Suez and Shell LNG, as these two companies have expressed commitments to supply LNG for 20 years.