Exxon’s exit deals blow to Pak LNG import plan

Reuters

Exxon Mobil has pulled out of a major project in Pakistan, in a potential blow to plans to boost imports of liquefied natural gas (LNG) after years of winter shortages. Differences among the six-member group behind the project in Port Qasim in Karachi mean French oil major Total and Japan’s Mitsubishi may also quit and join a rival scheme, government officials and industry sources told Reuters.
A senior Pakistani government official put the chances of success for the project, set to be Pakistan’s third and biggest by import capacity, at 10-20 percent due to the disagreements. A highly-developed pipeline grid, extensive industrial demand and the biggest natural gas-powered vehicle fleet in Asia after China and Iran make Pakistan an easy fit for LNG and official estimates show imports could jump fivefold to 30 million tonnes per annum (mtpa) by 2022.
The new project would include a floating storage and regasification unit (FSRU), where LNG will be converted back into gas for feeding into the country’s grid. While Exxon has pulled out, the US company was now negotiating to join a separate project, Hasil Bizenjo, Pakistan’s Maritime Affairs minister in charge of ports, said.
“They are thinking to build a
new terminal in Port Qasim,” Bizenjo told Reuters in the Pakistan capital Islamabad, adding that
Mitsubishi and Total were also in talks about taking stakes in another consortium.
Exxon was pulling out because it had “issues with partners”, particularly the developer, GEIL, one energy official said. Exxon Mobil, Total and GEIL declined to comment, while a Mitsubishi spokesman said that the Japanese company has been continuing its talks with
partners over the project.