ISLAMABAD:
The government has decided, in principle, to give a 30-year lease extension to Engro Vopak Terminal Limited (EVTL), which will enable it to continue to run a liquefied petroleum gas (LPG) and liquid chemical terminal at Port Qasim. According to sources, the Port Qasim Authority (PQA) signed the second Supplemental Implementation Agreement (SIA) with EVTL on January 15, 2025 and the third SIA on February 24, 2025. EVTL had submitted its initial proposal on January 15, 2025.
Multiple meetings were held between PQA and EVTL teams in the presence of representatives from the Ministry of Maritime Affairs and the Ministry of Finance.
A detailed analysis of EVTL’s model, financial statements and contractual obligations was conducted to assess the model’s veracity. Consequently, EVTL submitted its final proposal on February 26, 2025.
PQA board proposed an extension in the EVTL concession term for another 30 years on February 27, 2025, effective from June 18, 2026, on a build, operate and transfer (BOT) and non-exclusive basis, subject to concurrence of the Ministry of Maritime Affairs and the Special Investment Facilitation Council (SIFC).
Sources said that SIFC agreed with the PQA board’s decision for the extension in concession term.
The government had in 1995 allocated a piece of land to EVTL at Port Qasim and its lease is going to expire in 2026. Now, EVTL is asking the government to extend the lease.
Earlier, the Ministry of Maritime Affairs refused to extend the lease as it was planning to float a fresh tender. EVTL claims it has spent $100 million and intends to continue investing in the project if the government extends the lease agreement. Interestingly, the extension in lease is not part of the agreement, that’s why the maritime affairs ministry is reluctant to endorse it. PQA itself could not extend the lease and it would have to float a tender under the Public Procurement Regulatory Authority rules.
Apart from the LPG and liquid chemical terminal, a liquefied natural gas (LNG) pipeline also passes through this land that connects an LNG terminal owned by Engro with Sui Southern Gas Company’s network.
Recently, the matter was taken up in an SIFC meeting. The council set a deadline for the Petroleum Division to complete negotiations with EVTL.
PQA had informed the government about the initiation of another round of negotiations with EVTL by signing the second supplemental agreement on January 15, 2025.
It emphasised that a third-party business valuation of the terminal was necessary, which required additional time. PQA was of the view that the deadline of January 31, 2025 could not be met due to the extensive due diligence required in the process.
It requested an extension in the deadline to assist in the independent valuation of assets. The government granted extension of 30 days (until March 2) for finalising ongoing negotiations with EVTL through signing the third supplemental agreement.
It decided that the Finance Division would facilitate PQA by providing services for the independent evaluation of assets.
