Engro to set up second LNG terminal in Karachi
AMANULLAH KHAN KARACHI—Engro Corporation has decided to build a second liquefied natural gas (LNG) terminal, betting a revival in economic growth will boost demand for electricity. ENGRO is looking at the possibility of constructing a 400 to 600 million cubic feet a day LNG terminal, through a partnership, for private sector companies, Chief According to Executive Officer Khalid Siraj Subhani Engro also plans to build a 450 megawatt LNG-fueled power plant for as much as $700 million. Engro is also looking to invest overseas in energy and fertilizer after the firm sells stakes in existing businesses, he said. “The idea is to keep expanding; there is a strong desire,” Subhani said in Karachi, Pakistan’s commercial capital.
“There are so many elements we are working on, how they will materialize it depends, but the shift will happen toward energy.” Engro is seeking to turn an energy crisis in South Asia’s second-largest economy into an opportunity as the government of Prime Minister Nawaz Sharif pushes to end short- ages within two years. The nation is adding power plants with the help of Chinese investment and started importing gas last year with Engro building the nation’s first LNG terminal. Outages lasting 18 hours had led to street protests in Karachi as recently as June, while falling natural gas production at home forced companies to idle its plant. The energy starved nation’s average electricity generation is 16,000 megawatts with deficit peaking to about 5,000 megawatts in the summer, according to Tahir Abbas, analyst at Arif Habib Ltd.
Engro is also part of a joint venture to produce 660 megawatts of electricity from plants that will be built and start around June 2019 that will use coal for the first time from deposits in the southern Pakistan region of Thar, which has one of the world’s largest lignite quality coal deposits. The company plans to double production and coal mining in the second phase of the project. Construction has started with about 200 Chinese workers on site for the $2 billion project, said Subhani. The project, part of China-Pakistan Economic Corridor plan announced last year, includes about $820 million loans from Chinese banks.