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FBR issues SRO for waiving  taxes & duties on import of new FSRUs

FBR issues SRO for waiving  taxes & duties on import of new FSRUs

ISLAMABAD: The government has exempted from duties and taxes the import of new floating storage and re-gasification units (FSRUs) for liquefied natural gas (LNG) terminals, which will pave the way for Engro Elengy Terminal Pakistan to replace the existing unit with a new one with additional capacity.

The current LNG terminal has a handling capacity of 690 million cubic feet per day (mmcfd) whereas the new FSRU would have capacity of 790 mmcfd.

Earlier, Engro had brought an old vessel, which had been used in Kuwait for five years, since it had a lower cost and established the first LNG terminal in the country.

“Engro will import a new FSRU with additional capacity to replace the existing one,” an official said. The Federal Board of Revenue (FBR) has issued a Statutory Regulatory Order (SRO) for waiving taxes and duties on temporary import of floating LNG units.

According to officials, Bangladesh had followed that model and set up a floating LNG terminal. Later, it shifted policy and turned towards setting up an onshore LNG terminal.

They suggested that Pakistan should follow the same model by setting up onshore LNG terminals for future imports.

The government wants to add an additional LNG capacity of 200 mmcfd to the system and has floated a tender in this regard. Bids will be opened next week.

It may also utilise the additional capacity of the new floating unit. Second LNG terminal has handling capacity of 790 mmcfd, of which the government has dedicated capacity of 600 mmcfd.

At present, the two LNG terminals in the country are handling over 1,100 mmcfd of gas. Of this, the power sector is consuming 790 mmcfd and the fertiliser industry 180 mmcfd.

Pakistan State Oil (PSO) is currently importing 500 mmcfd of LNG from Qatar. Pakistan LNG Limited (PLL) has short and long-term contracts for import of 200 mmcfd whereas the remaining 400 mmcfd is being purchased through spot contracts.