PGP Consortium Limited (PGPC) is a significant player in Pakistan’s energy sector, primarily involved in the import, storage, and regasification of liquefied natural gas (LNG). As a cornerstone of the country’s energy sector, it contributes to Pakistan’s economic growth and energy security through its innovative and efficient LNG infrastructure projects.
Below is a detailed overview of the company:
Overview of PGP Consortium Limited
- Establishment and Ownership: PGPC was established in September 2015 and is a wholly owned subsidiary of Pakistan GasPort Limited (PGPL). The company is headquartered at Associated House, Seven Egerton Road, Lahore, Punjab, Pakistan.
- Business Model: PGPC operates an LNG import terminal at Port Qasim, Karachi, which is a critical infrastructure project for Pakistan’s energy security. The terminal has a capacity of 750 million standard cubic feet per day (mmscfd) and provides regasification services to Pakistan LNG Limited (PLL) under a long-term contract.
Key Projects and Operations
- LNG Terminal: The terminal, located at Mazhar Point, Port Qasim, Karachi, began commercial operations in November 2017. It includes a state-of-the-art Floating Storage and Regasification Unit (FSRU) named BW Integrity, which has a storage capacity of 170,582 cubic meters and a regasification capacity of 750 mmscfd.
- Investment and Partnerships: The project represents an investment of approximately $500 million, with contributions from PGPC, BW Group (which owns the FSRU), and Fauji Oil Terminal & Distribution Company Limited (FOTCO) for pipeline infrastructure. Mitsui & Co. also holds a 49% stake in the FSRU through a joint venture with BW Group.
- Capacity and Tariff: PGPC has contracted to provide 600 mmscfd of LNG regasification services to PLL at a tariff of $0.4177 per million British thermal units (mmbtu), one of the lowest tariffs in the world.
Financial and Operational Performance
- Credit Ratings: PGPC has maintained strong credit ratings, with VIS Credit Rating Company Limited assigning it an “A-/A-2” rating, reflecting good credit quality and stable financial performance. The ratings are supported by the company’s long-term contract with PLL, ensuring steady cash flows.
- Arbitration and Legal Matters: In 2023, PGPC successfully resolved arbitration proceedings with PLL in the London Court of International Arbitration, which had previously placed its ratings on “Rating Watch-Developing” status. The resolution reinforced the company’s financial stability.
Strategic Importance
- Energy Security: The terminal is a key component of Pakistan’s energy infrastructure, supporting 3,600 megawatts of power generation and saving an estimated $2 billion annually in foreign exchange through fuel substitution.
- Private Sector Role: PGPC has sought to expand its role in the private LNG market by requesting pipeline capacity allocation for additional LNG imports, aiming to utilize its excess capacity of 150 mmscfd.
Future Prospects
- Expansion Plans: PGPC and its partners are developing a second LNG terminal at Port Qasim, which will further enhance Pakistan’s LNG import capacity. The two terminals are expected to represent a collective investment of over $1 billion.
- Market Growth: With Pakistan’s LNG demand projected to grow significantly, PGPC is well-positioned to play a pivotal role in meeting the country’s energy needs.