Singapore — Rotterdam-based Royal Vopak has acquired a 29% share in Elengy Terminal Pakistan, whose subsidiary Engro Elengy Terminal owns a floating LNG import facility anchored at Port Qasim in Pakistan, the companies said in a joint statement Friday.
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The deal gives Vopak, the world's largest independent petroleum storage company, a foothold in Asia's expanding market for LNG infrastructure, driven by growing adoption of LNG as a fuel source. It also underscores how traditional oil-focused companies are diversifying to natural gas in line with oil major strategy.
"This new step in our cooperation gives Vopak an excellent entry in the growing Pakistan LNG market. This fits very well with our ambitions to grow and diversify our service offering in LNG," Vopak's chairman and chief executive Eelco Hoekstra, said.
As of end-April, Vopak operated 66 terminals globally with a storage capacity of 35.9 million cu m, but gas products accounted for only 3-5% of its total portfolio, while the bulk was oil products at 40-45% and the remaining were chemical facilities, industrial terminals and vegetable oils storage.
Even most of Vopak's growth projects under development for 3.1 million cu m of capacity are for oil products, chemicals and LPG. Vopak has said it continues to look for opportunities in the LNG infrastructure market and the FSRU market on a project-to-project basis through joint ventures or acquisitions.
The share purchase agreement between Vopak and Engro, who already operate the Engro Vopak chemical terminal jointly near Port Qasim, is for Pakistan's first LNG import facility that started operations in 2015, and supplies gas to state-owned Sui Southern Gas.
Engro holds a 15-year time charter for the FSRU and the project has long-term LNG supply contracts for feeding power generation, industrial use and as feedstock for fertilizers in Pakistan, which is a market of more than 200 million people and growing energy demand.
The deal is subject to regulatory and shareholder approvals, and expected to close in the fourth quarter of 2018. After the deal, the LNG terminal's shareholders will be Engro, Vopak and the International Finance Corporation.
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