Govt approves 30-year lease extension for Engro Vopak Terminal at Port Qasim

The government has agreed, in principle, to extend Engro Vopak Terminal Limited’s (EVTL) lease for another 30 years, enabling the company to continue its operations of a liquefied petroleum gas (LPG) and liquid chemical terminal at Port Qasim. 

According to a news report, the decision follows a series of agreements and meetings between the Port Qasim Authority (PQA), EVTL, and relevant government bodies, including the Ministry of Maritime Affairs and the Ministry of Finance.

On January 15, 2025, PQA signed the second Supplemental Implementation Agreement (SIA) with EVTL, followed by the third SIA on February 24, 2025. These agreements stemmed from EVTL’s initial proposal, submitted earlier in January. The negotiations involved a thorough evaluation of EVTL’s business model, financial statements, and contractual obligations to ensure the viability of the extension.

The PQA board formally proposed the 30-year lease extension on February 27, 2025, effective from June 18, 2026. The terms include a build, operate, and transfer (BOT) arrangement, which would be non-exclusive, pending approval from the Ministry of Maritime Affairs and the Special Investment Facilitation Council (SIFC). SIFC has since agreed with the proposal to extend the concession term.

The land in question, which was allocated to EVTL in 1995, is set to expire in 2026. EVTL had initially sought the lease extension, citing an investment of $100 million in the project and its commitment to continuing development. 

While the Ministry of Maritime Affairs had initially resisted extending the lease in favor of issuing a new tender, the government has now agreed to proceed with the extension.

The discussions also touched upon the operational infrastructure on the land, which includes an LNG pipeline linking the Engro-owned LNG terminal to Sui Southern Gas Company’s network. The matter was recently reviewed at an SIFC meeting, where a deadline was set for the Petroleum Division to finalize negotiations with EVTL.

Earlier, PQA had communicated that further negotiations would require a third-party business valuation of the terminal, pushing the original deadline of January 31, 2025, beyond reach. The government then granted a 30-day extension to allow for the completion of these evaluations, with a new deadline set for March 2, 2025.

The Finance Division has been tasked with assisting PQA in facilitating an independent asset evaluation, which is a crucial part of the ongoing negotiations with EVTL.