KARACHI: Engro Corp plans to build a second LNG terminal with a capacity of around 400 to 600 million cubic feet a day, in a move that seems to convey its strategic expansion in the energy sector, while holding back its traditional fertiliser business.
The company is hoping that with economic revival, there will be greater demand for energy. Therefore, the company plans to build a 450MW LNG power plant worth $700 million. The statement stated that the Karachi-based company would be looking for a private investor for constructing its second LNG terminal, as per the company’s CEO Khalid Siraj Subhani.
He further stated that Engro was also looking to invest overseas in energy and fertiliser after the firm sells stakes in the existing businesses. Subhani said that there are many elements that the company was working on, but the overall shift would be towards energy.
As per Arif Habib Group’s analyst Tahir Abbas, the country’s generation capacity stood at 16,000MW while the excess demand peaks at around 5,000MW in the summer. This deficit has been the focus of Engro’s management, as it seeks to turn the crisis into an opportunity. Incentivised by favourable policies, the company slowly diversified as opportunities in the energy sector showed up.
The statement pointed out that Engro was also part of a joint venture to produce 660MW of electricity from plants that will be built and start around June 2019. This would be the very first time that coal from Thar deposits would be used to fuel a power plant, since coal extraction is an expensive task especially for a tricky terrain like Thar, and it was thought to be all but impossible till collaboration between the Sindh Government and Engro Corp proved otherwise.
The company plans to double production and coal mining in the second phase of the project. Construction had started with 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 nearly $820 million loans from Chinese banks.