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The acquisition of PSM property is expected to be approved by the SSGC board

ISLAMABAD: Sui Southern Gas Company (SSGCboard )’s of directors is expected to approve the leasing of a piece of land from Pakistan Steel Mills (PSM) to establish a tie-in point for two new LNG terminals.

According to The Express Tribune, SSGC was first hesitant to purchase the property for the tie-in point, but following intervention from Petroleum Division Secretary Dr Arshad Mahmood, the business consented.

It now holds a lease on roughly 17 acres of property from PSM. Private companies are constructing LNG terminals.

The Petroleum Division had notified the Cabinet Committee on Energy (CCOE) at a meeting that the problem of the tie-in point had been handled and that SSGC had obtained property on lease from PSM.

The SSGC board of directors is expected to consider the topic at its next meeting and approve the purchase, according to officials.

The Ministry of Maritime Affairs addressed the committee on the two new LNG terminals during the meeting. It also reviewed the Oil and Gas Regulatory Authority’s (Ogra) rule requiring SNGPL to allocate 250-300 mmcfd of pipeline capacity to each new LNG terminal developer.

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It told SSGC to provide land for the establishment of a tie-in point for the new LNG terminal developers on the same terms that were offered to earlier terminals.

The CCOE asked both terminal developers to close their final investment decisions (FIDs) within 60 days of signing the Gas Transportation Agreement (GTA).

It said that the allocation of pipeline capacity to the new LNG terminals along with execution of a gas transportation agreement (GTA) would enable the terminal developers to achieve their FIDs.

The Petroleum Division stated that after extensive deliberation, a consensus had been reached with both companies (SNGPL and SSGC) to make the pipeline capacity available on a three-month rolling basis.

According to it, the capacity will be available to the new LNG terminal developers with effect from January 1, 2023.

SSGC would allocate 200 mmcfd of pipeline capacity to Tabeer Energy and 150 mmcfd to Energas while SNGPL will provide 50-100 mmcfd to Tabeer Energy and 100-150 mmcfd to Energas.

Both terminal developers will be requested to communicate (within 60 days) the dates of FID and commercial operations to enable both utility companies to effectively manage the capacity allocation.

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They will also be directed to conclude the Gas Transportation Agreements (Access Agreement) with both utilities to allow Ogra to initiate the approval process.

The Petroleum Division added that next steps would include coordination between the entities for the utilisation of allocated capacity after commercial operations date.

The CCOE chairman acknowledged the efforts made by the Petroleum Division in reaching consensus with both parties for the allocation of pipeline capacity to the new LNG terminal developers.

The minister for maritime affairs was of the view that the allocation of pipeline capacity, as proposed by the Petroleum Division, may not serve the purpose.

He stated that the terminal developers would not be able to close FIDs on the proposed capacity allocation as offered by the Petroleum Division.

He informed the cabinet body that both the terminal developers were satisfied with the allocation of pipeline capacity in the SSGC network.

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