Engro Corporation and Vopak have closed the deal signed earlier this year in relation to the Dutch company’s acquisition of a 29 percent share in Elengy Terminal Pakistan Ltd. (ETPL). Engro Corporation has sold 24 percent and IFC has sold 5 percent shares in ETPL to Vopak LNG Holding, leaving Vopak with a 29 percent shareholding in ETPL. The total foreign direct investment from this deal is expected to be around $31.4m.
This is the culmination of over a year-long due diligence exercise by Vopak that delved into the operational, financial and regulatory aspects of this transaction. It also takes Foreign Direct Investment generated by Engro to $550m in total over the last three years. This inflow of dollars places Engro among the top 15 exporters of Pakistan in terms of foreign exchange receipts on an annualised basis during this period.
ETPL’s wholly owned subsidiary, Engro Elengy Terminal (Pvt.) Ltd. (EETPL) owns an LNG facility which is located in Port Qasim, adjacent to the Engro Vopak chemical terminal on the mainland side of the channel into Port Qasim. The facility has been in operation since 2015 and is the first LNG import facility in Pakistan. It has regasified 590 billion cubic feet of gas since inception and has met all of its contractual commitments and obligations to date.
The facility consists of an LNG jetty including a 7.5 km high pressure gas pipeline. This pipeline is connected to the grid of EETPL’s sole customer Sui Southern Gas Company Ltd. (SSGC), a Pakistan government owned entity. EETPL holds a 15-year Floating Storage and Regasification Unit (FSRU) time charter.
The liquified gas is supplied, under long-term contracts, via LNG carriers from various exporting countries to the FSRU, which is moored to the EETPL jetty and connected to its pipeline. The regasification takes place on board the FSRU and the gas is transferred to the mainland where, under high pressure, it enters SSGC’s grid.
Pakistan is a market with more than 200 million people and has a growing energy demand in which the share of gas is expected to increase. Gas is mainly used for power supply for the growing population, industrial usage and as feedstock for fertilisers.
Vopak and IFC have separately agreed that the remainder of IFC’s shares will be acquired by Vopak pending certain regulatory consents and approvals. After completion of this transaction, the shareholders in ETPL will be Engro Corporation (56%) and Royal Vopak (44%).
For more information visit www.engro.com and www.vopak.com
19th December 2018
