Project Proposal

Introduction
The use of natural gas (NG) for energy production and house heating is in expansion, due to its
lower cost and lower emissions of greenhouse gases.
NG is transported as a compressed gas in pipelines, or as a liquid (LNG) by sea when the
distance
between the production and delivery points is so wide to make pipelines too expensive.
In addition, transportation via pipelines requires a serial recompression of gas, with a
consumption
of the gas itself, to feed the gas turbines which move the compressors. The pressure drop is
usually
of 25 bars, from 70 to 45, in 250 km; each recompression involves a consumption of about 0.5%
of
the gas itself, i.e. 2% in 1000 km. Such losses, in addition to the cost of pipelines, make the gas
transportation as LNG more convenient over very long distances

The use of natural gas (NG) for energy production and house heating is in expansion, due to its
lower cost and lower emissions of greenhouse gases. NG is transported as a compressed gas in
pipelines, or as a liquid (LNG) by sea when the distance between the production and delivery
points is so wide to make pipelines too expensive. In addition, transportation via pipelines
requires a serial recompression of gas, with a consumption of the gas itself, to feed the gas
turbines which move the compressors. The pressure drop is usually of 25 bars, from 70 to 45, in
250 km; each recompression involves a consumption of about 0.5% of the gas itself, i.e., 2% in
1000 km. Such losses, in addition to the cost of pipelines, make the gas transportation as LNG
more convenient over very long distances.
The production of LNG, which involves cooling of the natural gas down to -160 C, requires
strong energy consumptions, which in present plants require the consumption of at least 10% of
the gas itself, with sophisticated processes, huge heat exchange surface areas and high
investment costs. LNG is then loaded on special ships with insulated tanks of capacity over
100,000 m3 and carried to the regasification plant, at a harbour across the sea. The insulation of
the tanks is so good that practically no evaporation of LNG happens during the trip, but its
temperature is let to raise a little and the vapor pressure to increase by about 0.1 bars, without
need of wasting vapours. Furthermore, the transportation of LNG is also dependent upon the
geographical location of specified delivery points.

Problem Statement
When it comes to Pakistan, the country with the population of approximately 22.5 million people
used NG as a primary source of energy for production and residential heating requirements. This
turns out into the depletion of natural resources with respect to time. Thus, the concept of LNG
was introduced to meet the residential heating requirements. Pakistan is a relatively new player
in global LNG market but has quickly become a major importer. Depleting indigenous gas
reserves and a transition towards cleaner and cheaper power generation have been the major
factors driving the country towards adding LNG to its energy mix. However, the use of LNG is
very limited with respect to neighbouring countries. Therefore, the business model for the LNG
import has been proposed to meet the customers energy requirements.

Industrial Overview
Pakistan has an LNG import infrastructure with capability of handling thirteen vessels per month
with load size ranging from 143,000 CBM to 165,000 CBM. At present, nearly 23% of the
country's natural gas consumption is being met through imported LNG. Pakistan’s two LNG
terminals have the storage capacity of approximately 140,000 tons of LNG and regasification
capacity of 1.35 BCFD, out of which 1.2 BCFD is contracted to South Southern Gas Company
(SSGC). At present there are 13 major LNG importers are functioning in Pakistan.

Our Proposal
Currently, Pakistan has in total of 13 suppliers that supplies LNG to the local consumers from
the two LNG terminals. The suppliers are transporting 18% of LNG to the residential consumers
which depicts the gap of huge consumer market that can be captured. Therefore, we have
proposed an LNG import business model that buys the LNG from the state-owned terminals and
transport it to the filling station. Once the LNG is transported to filling station then LNG can be
transported to local consumers through LNG cylinders. The filing station will be established in 2
cities based on the analysis of potential consumer requirements.

Objectives
1. Establishment of the contract/licence with government for obtaining the purchasing and
selling rights to local market.
2. Development of filling stations at two proposed sites.
3. Establishment of contract with local LNG transporters.
4. Registration of the organization to SECP.

Project Scope
The scope of the project is to establish a filling facility of LNG at the two proposed sites. The
import-based business buys the LNG from the two LNG terminals located at Karachi port and
transport it to filling stations located at proposed sites. After the LNG will be transported to
filling stations, it will be transported to local consumers at some adjusted margin.

Timeline for Execution

The high-level execution plan for the proposed business model is as follow:
Description Start Date End Date Duration (Days)

Project Start 01-10-2022

Market survey at proposed sites 01-10-2022 10-11-2022 41

Acquire land at proposed sites 10-11-2022 10-12-2022 30

Establishment of LNG filling facility 10-12-2022 20-05-2023 162

Registration of Company to SECP 20-05-2023 01-06-2023 11

Contract with state owned LNG terminals 02-01-2023 01-07-2023 29

Contract with local LNG transporter(s) 02-07-2023 15-07-2023 13

Marketing 16-07-2023 30-07-2023 15

Project End 15-07-2023