Investment Opportunity LNG Terminal
Sonmiani Pasni Gwadar Port Authority Ormara Naval Harbour Karachi Port Trust Keti Bandar Port Qasim Authority Legend Existing Ports Potential sites 2
Port Qasim Khirpranwala site EV site Confidential Pakistan LNG: site selection
INTRODUCTION _ EVTL JVbetweenEngroCorpand RoyalVopakofNetherlands First bulk liquid chemical, LPG and Cryogenic storage terminal at Port Qasim Handling 74% of bulk liquid chemical imports; 70% of LPG imports International Certifications besides customer audits Facilitated over USD 1.5b investment in Pakistan Operated by Engro Healthy returns 4
INTRODUCTION EVTL A 50/50 JVbetween EngroChemicalPakistan Limited and Royal Vopakof Netherlands Operating a state of the art bulk liquid chemical and LPG storage terminal at Port Qasim Handling 74% of the bulk liquid chemical imports and 70% of the LPG imports to Pakistan International Certifications <Footer> 24/05/2011 5
Business Ventures 100% Engro 100% Fertilizers 100% 100% Engro Vopak 50% Engro Polymer & Chemicals 56% 63% 95%
Business Ventures Investing USD 1.5b ENGRO s Subsidiaries/Affiliates Year of Est. Engro s Stake Key Equity Partners Business Areas Expansions Underway Engro Chemical Pakistan Limited (ECPL) 1965/ 1991 100 % Dawood Group, General Public & Others Fertilizer Manufacturing & Marketing Urea Production Capacity Expansion (US$ 1050mn) Engro Vopak Terminal Limited (EVTL) 1997 50 % Royal Vopak (Netherlands) Bulk Chemical Handling Jetty Terminal Capacity Expansion completed (US$ 35mn) Engro Polymer & Chemicals Limited (EPCL) 1999 56 % Mitsubishi Corp/IFC PVC & VCM Manufacturing Back Integration into VCM & PVC capacity Expansion (US$ 240mn) completed Avanceon 2003 63 % Wains Industrial Automation Acquired equity in US Company Engro Foods Limited (EFL) 2005 100 % None Food Processing & Marketing Dairy Ice-cream Manufacturing Plant (US$ 100mn) completed Engro Energy Limited (EEL) 2006 95 % IFC Power Generation Power Generation Plant (US$ 220mn) completed Engro Eximp Private Limited (EEPL) 2006 100 % None Fertilizer Trading & Rice Exports Integrated Rice Mill under construction by 4Q10 Engro PowerGen (Pvt.) Limited (EPGL) Engro PowerGen 2008 100 % None Power Project Development New Project Feasibilities underway-thar
Engro s Financial Strength ENGRO is a large corporation of the country with double digit earning growth inthelastdecade Assets: Revenue: Profit after tax: Market capitalization: PKR 164.8 billion( USD 1.94 billion) PKR 79.9 billion( USD 940 million) PKR 6.8 billion( USD 80million) PKR 63.5 billion(usd 740 million) Currently has long term credit rating of AA from Pakistan Credit Rating Agency USD 1.05bn Investment in one of the world s largest fertilizer complex Presence in 14 countries around the world (In Middle East, N. Africa, S.E. Asia & USA)- Mainly through Avanceon <Footer> 24/05/2011 8
Engro Vopak has maintained an impeccable safety record since its commissioning in November 1997 and is internationally certified for safety, security, quality, and environment. Over13Yearsofsafeoperation 4,845dayswithoutLTIasofFebruary28,2011 Engro Vopak has acquired an Integrated Management System (IMS) for a combined and coordinated certification on ISO 9001, ISO14001 and OHSAS 18001 standards. EVTL is the only terminal in Pakistan which has been audited and verified by the European based international non-profit making foundation, Chemicals Distribution Institute for Terminals(CDI-T). Engro Vopak has also acquired certification on International Code for the Security of Ships and Port Facilities(ISPS). E V T L
Vopak Standards implemented. Which includes Safety, Health, Environment, Security, Maintenance, Procurement, Operations, CRM, Sustainability etc. Internal survey of Behavioral Based Safety (BBS) completed in 2010; Average score was 3.86 (out of 5)andthelastaverageof3.1in2008;whichshowsanimprovingtrend. EVTL secured more than 75th percentile score 4 (out of 5) in all ten elements of Organizational Culture Survey conducted in 2010 by BST Malaysia, which is validating internal BBS survey. THA is an advanced version of CDI-T audit. An external audit was done by Vopak in 2010. EVTL scored 95% score in this audit. E V T L
Environmental Management System (ISO 14001:2004) certification in 2005, surveillance and recertification audit to date without any non compliance. No Environmental damage/incident since startup (1997). Annual Environmental Compliance reports which includes Toxic Gas Monitoring in all product areas Vehicle Gas Emissions Monitoring Equipment Exhaust Gas Monitoring Sewerage/Effluent Waste Monitoring Hazardous waste disposal through incineration Solid/Horticulture waste disposal on CDGK/PQA approved sites Reduced EVTL s carbon foot print (equivalent) from approximately 850 tons/annum to 785 tons/annum through Energy Management and LEAN initiatives (executed 8 projects). Soil and Ground water assessment being conducted in 2011 to evaluate any contamination inside EVTL boundaries. E V T L
EVTL Mangrove Plantation
Existing Jetty Handling capacity 75,000 DWT- Facilitating over USD 1.5b investments
EVTL Jetty LPG ship being unloaded-usd 10m investment in storage
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Dangerous Chemicals stored and handled in environment friendly manner
First cryogenic (-103 degress C) product being unloaded at EV Jetty
Ethylene Storage Tank: USD 33m Investment in 2009
Rapidly growing gap between energy demand & indigenous supply 150.0 Oil/LPG Gas Coal Hydel Nuclear Renew ables 125.0 100.0 137.64 103.80 (Million TOEs) E V T L 75.0 50.0 Initial Target 48.91 44.08 25.0 0.0 33.84 39 1994-95 1996-97 1998-99 2000-01 2002-03 2004-05 2006-07 2008-09 2010-11 2012-13 2014-15 2016-17 2018-19 2020-21 2022-23 2024-25 Options limited to import gas
Energy Crisis of the Country A total of 95.8 TWhof electricity was generated in Pakistan from July 2008 to June 2009. Generation through domestic natural gas 32.4% Furnace Oil contributes 35.4% HydelPower 30.3% Currently, the country is facing over 5000 MW shortfall of electricity which forced PEPCO to carry out 10 to 12 hours of load shedding. Amongst all the available fuels for thermal power projects, gas offers the most benefits in terms of plant economics, efficiency, availability and emissions Currently, Pakistan is having a gas deficit of around 1 billion cubic feet per day LNG is the only viable fuel option for developing new power project which can then be developed on fast track.
Pipeline import options are challenging Caspian Sea Gas Import Pipelines TURKMENISTAN TAJIKISTAN Dauletabad Field CHINA Mazar-e-sharif TAP AFGHANISTAN Islamabad Disputed Territory Herat Kandhar D.I Khan Lahore Quetta Multan PARS OFFSHORE FIELD QATAR Assaluyah Bandar Abbass QP IRAN PAKISTAN IP Charhbakhr Jiwani Gawadar Karachi 100kms Arabian Sea Sui BHONG INDIA Iran (IPI) - structurally most cost efficient, however political uncertainties Turkmenistan (TAP) - broad international support. Issues - Reserves? Security? Qatar-Pakistan - technically feasible, political benign; Qatar s priority?
Need of Time EVTL s LNG TERMINAL EVTL focus is on the fastest method to facilitate LNG flow into the NG pipeline network in Pakistan through a floating terminal on open access concept. Open access is an independent terminal concept where several suppliers or off-takers can be customers and own terminal capacity EVTL strongly positioned with suppliers, buyers, GOP& GoP/GoS First time mover advantage significant; achievable Our Project will Provide Credibility to Suppliers - COP, GDF Suez, Shell, Mitsubishi, BG and BP.. Ensure Phased Capacity Growth floating/offshore moving to land storage
Brown Field Site (Option 3): E V T L
EasyLNG TM - Regasification Solution 25
EVTL s focus is on establishing an open access or merchant floating storage re-gasification terminal as part of the unbundled structure under the LNG Policy 2006 with following salient features. ITEM Mooring Infrastructure PARAMETERS Side by Side Arrangement with Ship to Ship transfer Jetty design to handle ships having LOA of 350m Size of LNGC 29,000 MT to 60,000 MT Deepening and Widening of the PQA channel is planned and there after LNGCs of larger size may arrived at Jetty Size of FSRU 50,000 to 60,000 MT Gas Flow Rate Upto600 MMSCFD E V T L
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EVTL s Progress NOC from PQA for Greenfield terminal at Khiprianwala issued in 2010 EVTL completed Quantitative Risk Assessment (QRA) EVTL completed ESIA and public hearing was held in 1 st week of April Lloyd s Register completed HAZID & Channel simulation OGRA preliminary construction license obtained; full license application submitted Preliminary technical & financial proposal approved by PQA; draft IA obtained. Update/vetting of screening study underway with Energy and Power (+/-20%) Potential Partners Sought FSRU EPC Offtakers IPPs and Fertilizer producers -demand of over 7 mtpa
Investment and job creation including growth of ancillary businesses Knowledge sharing and upgrade of skills of port and terminal resources Understanding of international standards and procedures including equipment upgrade at Port Reduced carbon footprint of the country Efficient operations of power plants Fast track development with stakeholders GDP growth Safe, reliable and efficient operations by a credible organization of Pakistan which is of comfort to stakeholders E V T L
Natural Gas Distribution Grid Pakistan State-controlled entities Sui Northern Gas Pipelines Ltd. (SNGPL) and Sui Southern Gas Company Ltd. (SSGCL) have geographical monopolies in the northern and southern parts of Pakistan respectively for the purchase, transmission, distribution and sales / marketing of natural gas 31
The Bigger Picture-Regional Energy Corridor Supply Transmission Distribution ISGC under PPP SSGC/SNGPL DISCOs PSO/OMCs Gas and Power Aggregator of Gas Cross Country/Border Industry E&P Oil and Gas pipelines IPPs Imported Gas Residences LNG Terminal Capacity Pipeline Capacity E V T L