A consortium of US-backed companies has proposed an investment of up to $4.4 billion in an integrated liquefied natural gas (LNG) project in Pakistan, covering imports, storage, regasification, gas transmission and sales to major consumers on a merchant basis.
The proposal comes after Energas, an earlier contender comprising the Lucky Group and QatarEnergy, withdrew from a similar project, citing major changes in Pakistan’s energy policy and requirements, along with longstanding unresolved policy and fiscal issues.
The proposed US consortium includes Global Vision Energy Partners (GVEP) and Khanjee Holdings, which are related companies, alongside strategic co-investors from other countries and General Mediterranean Holding, a Luxembourg-based US financial conglomerate.
The project sponsors have reportedly obtained consent from the Port Qasim Authority for the proposed site and submitted an application to the Oil and Gas Regulatory Authority (OGRA) for a provisional licence.
A special purpose vehicle (SPV) has also been incorporated to develop and manage the project while keeping its assets, liabilities and financial risks separate. Government facilitation has reportedly been extended through the Ministry of Maritime Affairs and the Petroleum Division of the Ministry of Energy.
The project has been approved for consideration under the US Trade and Development Agency’s (USTDA) project preparation programme. It may also qualify for partial financing from the US Development Finance Corporation, supported by export credit guarantees from the US Export-Import Bank for technology, equipment and services.
Pakistan currently lacks LNG storage facilities, leaving its regasified LNG supplies dependent on imported shipments and international energy market conditions.
The consortium plans to execute the project in two phases.
The first phase, estimated to cost $1.7 billion, will involve the construction of an LNG import terminal and storage facility comprising four tanks. The facility is expected to handle approximately 35 billion cubic feet (BCF) of LNG annually.
The second phase will involve building a 1,100-kilometre pipeline, with a diameter of 42 to 48 inches, to transport gas to upcountry markets. The pipeline will have an estimated capacity of 1.2 billion cubic feet per day (BCFD), taking the overall project cost to approximately $4.4 billion.
Pakistan had previously pursued a similar North-South gas pipeline project in collaboration with Russia.
The proposed venture is being structured as a merchant infrastructure platform designed to meet domestic regasification requirements while establishing a physical LNG storage and trading hub in South Asia for suppliers from the United States and the Middle East.
The consortium is also approaching local investors for up to 10 per cent equity participation, with indicative investments starting at $50 million per investor.
The sponsors expect to attract strategic participation from international energy and infrastructure funds and institutional investors, including Grey Rock Investment Partners, Kohlberg Kravis Roberts & Co, Blackstone Inc., Saudi Arabia’s Public Investment Fund and the Kuwait Investment Authority.
However, participation by these potential investors remains subject to due diligence, investment approvals and final agreements. No binding equity commitments have been confirmed so far.
The incorporated SPV will develop, own and operate the proposed facility as a regional LNG storage, regasification and trading hub. It will serve Pakistan’s domestic gas market while providing services to LNG suppliers from the United States and the Middle East.
Unlike conventional arrangements dependent on a single government-backed buyer, the project is designed to operate through a merchant-based commercial model.
Regasification tariffs for domestic consumers will be submitted to OGRA for approval, while other services, including storage, tolling and transshipment, will be priced according to market conditions.
The sponsors consider Port Qasim strategically important because of its existing port infrastructure and access for LNG carriers. Its location outside the Strait of Hormuz, a major global energy shipping route, is also viewed as a significant advantage.
Under the proposed financing structure, the project will follow a 70:30 debt-to-equity ratio.
GVEP is expected to hold a 26 per cent stake, followed by General Mediterranean Holding with 24 per cent. Khanjee Holdings and strategic co-investors will each hold 20 per cent, while local investors will account for the remaining 10 per cent in the first phase.
The first phase, estimated at $1.7 billion, is expected to require approximately $1.32 billion in debt financing and $510 million in equity, based on the proposed financing ratio.
The final project cost will be determined after the execution of engineering, procurement and construction (EPC) contracts and other construction and supply agreements.
The commercial framework is expected to combine long-term tolling and storage agreements, transshipment arrangements and take-or-pay commitments where appropriate. The remaining capacity will be available for merchant-based activities.
The proposed tolling tariff for the LNG terminal and storage facility stands at $4.93 per million British thermal units (mmBtu), while the separate gas transmission tariff is estimated at $1.91 per mmBtu for the first 10 years.
Both rates are projected to decline thereafter, with the terminal and storage tariff falling to $2.20 per mmBtu and the transmission tariff to $0.92 per mmBtu.
The planned terminal will comprise four LNG storage tanks, each with a capacity of 140,000 cubic metres, providing a combined static storage capacity of 560,000 cubic metres.
Based on three inventory turnover cycles annually, the facility is expected to handle around 35.6 BCF of LNG each year, with approximately 11.9 BCF of storage capacity available during each cycle.
If implemented, the project could expand Pakistan’s LNG infrastructure, introduce dedicated storage capacity and establish a regional platform for gas trading and transportation. However, its progress will depend on regulatory approvals, financing arrangements, investor commitments and the finalisation of construction and supply contracts.
