Royal Vopak has signed a deal with International Finance Corporation (IFC) to increase its stake in Elengy Terminal Pakistan (ETPL), the owner of an operating LNG import facility in Pakistan, by a further 15%.
In July 2018, the Dutch tank storage company signed an agreement with Engro to acquire a stake of 29% in ETPL to take part in the Pakistani LNG import facility located at Port Qasim.
Financial terms of the latest transaction and the July transaction have not been disclosed. The current transaction will result in the exit of IFC from the LNG import facility, leaving Engro and Royal Vopak as the only shareholders in ETPL.
The LNG facility, which has been in operation since 2015, is owned by ETPL’s wholly-owned subsidiary Engro Elengy Terminal (EETPL). Located near the Engro Vopak chemical terminal, the facility features an LNG jetty including a 7.5km gas pipeline that is connected to the grid of Sui Southern Gas, the sole customer of EETPL.
The LNG import facility was constructed with at an estimated investment of $300m and has a storage capacity of 600 million cubic feet of LNG per day, reported The Express Tribune.
EETPL has a 15-year Floating Storage and Regasification Unit (FSRU) time charter. Through long-term contracts, the liquified gas is transported using LNG carriers from exporting countries to the FSRU, which is moored to the EETPL jetty and connected to the gas pipeline.
On the FSRU, regasification is carried out and the gas is transported to the Pakistani mainland where it enters the Sui Southern Gas grid under high pressure.
Royal Vopak, in a statement, said: “Pakistan is a market with more than 200 million people and has a growing energy demand in which the share of gas is expected to increase. Gas is mainly used for power supply for the growing population, industrial usage and as feedstock for fertilizers.”
The transaction between Royal Vopak and IFC will be based on meeting of certain conditions, including receipt of customary regulatory and shareholder approvals. Closing is expected during the first quarter of 2019 while the transaction involving Engro is likely to be wrapped up in the fourth quarter of 2018.