SSGCL to allocate its own land for two new LNG terminals

CCoE had ordered SSGCL in April for immediate handover of land possession for tie-in facilities near PSM

Islamabad   –   The Sui Southern Gas Company Limited (SSGCL) has decided to allocate its own land for tie-in points of two new LNG terminals as Pakistan Steel Mills (PSM)  was asking the lease rate which was 23 times higher than the Sindh government rate, it is reliably learnt here.  

Sui Southern Gas Pipeline Limited will provide its own land for the construction of two new LNG terminals as PSM  is asking for  Rs 35 million per acre for the lease of land, which is 23 times higher than the Sindh government lease rate of Rs 1.5 million per acre for 99 years, official sources told The Nation.

To further expand the country’s LNG market Ogra had granted Licences to Tabeer and Energas to undertake regulated activity related to the sale of re-gasified liquefied natural gas (RLNG). However, there were some impediments related to the allocation of land for tie-in facilities and allocation of pipeline capacity.

In April the CCoE had ordered the SSGCL for immediate handover of the possession of land for tie-in facilities near Pakistan Steel Mills. The inter-ministerial committee led by Minister for Maritime Affairs Ali Zaidi had also ordered the SSGC to hand over the possession of the land to both the LNG terminal developers within a week like other two terminals on the same terms and conditions. The committee had also decided that SSGC should not wait for the signing of the lease agreement with Pakistan Steel Mills (PSM) for handing over tie-in space to terminal developers and in the meantime also sign a lease agreement of land with PSM and make the payment accordingly. The Ministry of Industries and PSM informed that they have no reservation over the lease of land to SSGC; however the rate was too high. 

Regarding allocation of land for tie-in points, it was informed that it involves around 11 acre of land and the ownership of the land is with Pakistan Steel Mills Ltd (PSML). It had been approved from PSML board, the land will be provided to SSGCL, which will then sub-lease the same to new terminal developers. 

Reportedly PSM is claiming Rs 35 Million/acre for 30-years lease to the said land. SSGCL is of the view that PSM’ rate is on higher side as compared to government of Sindh’s rate of 1.5 million per acre for 99-year lease. During the 14th Inter-Ministerial Committee meeting held on June 17, 2021, it was decided that existing piece of land with SSGCL be utilised for construction of tie-in points for both the terminal developers. Further, SSGCL will provide the said land to both the terminal developers on same terms and conditions on which previous existing LNG terminals were granted. It was also decided that the firefighting station would be built by SSGC on the new piece of land, on which negotiations with PSM were being held. 

 Regarding pipeline capacity allocation in the Inter-Ministerial Committee meeting, it was informed that SSGC has offered allocation of pipeline capacity of 44 mmcfd to M/s Energas, and 150 mmcfd to M/s Tabeer till Pakland. SNGPL to allocate 75 to 100 mmcfd to each of terminal developers beyond Pakland.

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