ISLAMABAD: The Port Qasim Authority (PQA) has issued a provisional Letter of Intent (LoI) to Energas Terminal (Pvt) Limited (ETPL) for the establishment of a Liquefied Natural Gas (LNG) terminal at Port Qasim, it was learnt on Monday.
“The PQA has conveyed its intent to permit Energas furnish technical and financial proposals in line with project guidelines 2019 for the establishment of a dedicated LNG facility on a build-operate-transfer (BOT) basis at Port Qasim,” the LoI available with this scribe read.
The PQA has, however, asked Energas to fulfil some requirements for its final approval. “In the case of non-fulfilment of the requirements, the provisional LoI will be revoked automatically,” it added.
The authority stated that the provisional LoI was issued based on the fact that the company’s quantitative risk assessment (QRA) was individually feasible, however, final LoI would be issued after due evaluation of technical and financial proposals as per the project guidelines and combined assessment of all existing and upcoming LNG terminals by the PQA-appointed consultants.
Energas Terminal (Pvt) Limited is a consortium represented by Younus Brothers, Sapphire & Halmore and US energy giant ExxonMobil. The tolling capacity Energas’ LNG terminal would be between 750mmcfd and a maximum of 1,000mmcfd.
The ETPL has been asked to submit a mandatory concession fee of $10 million to Port Qasim, of which $2 million shall be paid within a period of 60 days after the issuance of the LoI while $8 million upon the signing of Implementation Agreement (IA).
“In case of non-submission of $2 million, this provisional LoI will be revoked automatically and in case of non-issuance of LoI by PQA due to any reason, $2 million will be refunded.”
PQA has also advised Energas to submit a mandatory performance bond of $10 million on the date of signing of IA while the performance bond would be forfeited and encashed in case of failure in the commissioning of terminal within 24 months from the date of signing of IA.
“In case of delay to commission the terminal within 24 months after signing of IA, liquidated damages at the rate of $10,000 per day would be imposed till commission of the terminal. Likewise, minimum royalty would be charged on 250mmcfd and secured through Bank Guarantee (BG) of $3 million to remain valid throughout the concession period,” it added.
PQA said royalty shall be charged at the rate of $1.9 per tonne (excluding taxes) which would be payable on a monthly basis. The royalty rate would increase 25pc every five years.
“The LNG terminal developer shall bind the shipping lines & consignees to pay berthage, pilotage, wharfage and all other applicable charges to PQA at prescribed gazette notified rates, revised from time to time,” the PQA provisional letter of LoI added.