Royal Vopak of Netherlands to buy 29% shares in Elengy Terminal Pakistan
Engro Corporation and Vopak have finalized the terms with ETPL.
(Web Desk) - Engro Corporation and Royal Vopak of the Netherlands Friday announced the signing of a Share Purchase Agreement in which Vopak will acquire a 29% share in Elengy Terminal Pakistan Ltd (ETPL), valuing around 38 million dollars.
Engro Corporation and Vopak have finalized the terms on which the proposed transaction will be consummated, which terms have been incorporated under the share purchase agreement executed between the companies as of July 19, 2018, the company said in a statement to Pakistan Stock Exchange.
In terms of the share purchase agreement, the consideration payable by Vopak to Engro would be nearly 38 million dollars for the Elengy Terminal shares amounting to 29 percent of the capital, the statement said. In addition, consummation of the proposed transaction in terms of the purchase agreement will be subject to procuring inter allia all applicable regulatory and corporate consents, the statement said.
ETPL’s wholly owned subsidiary, Engro Elengy Terminal (Pvt) Ltd (EETPL) owns an LNG facility which is located in Port Qasim in Pakistan, adjacent to the Engro Vopak chemical terminal on the mainland side of the channel into Port Qasim. The facility has been in operation since 2015 and is the first LNG import facility in Pakistan.
The facility consists of an LNG jetty including a 7.5 km high-pressure gas pipeline. This pipeline is connected to the grid of EETPL’s sole customer Sui Southern Gas Company Ltd, a Pakistan government-owned entity. EETPL holds a 15 year Floating Storage and Regasification Unit (FSRU) time charter.
The liquified gas is supplied, under long-term contracts, via LNG carriers from various exporting countries to the FSRU, which is moored to the EETPL jetty and connected to its pipeline. The regasification takes place on the FSRU and the gas is transferred to the mainland where, under high pressure, it enters the grid of the customer.
Pakistan is a market with more than 200 million people and has a growing energy demand in which the share of gas is expected to increase. Gas is mainly used for power supply for the growing population, industrial usage and as feedstock for fertilizers.
This acquisition is subject to certain conditions, including customary regulatory and shareholder approvals, and closing is anticipated to take place in the fourth quarter of 2018.
“We’re excited to enter into this mutually beneficial partnership with Royal Vopak which will allow Vopak to realise their strategy of entering the Pakistan energy market and will pave the way for Engro and Vopak to collaborate in further ventures at home and abroad using their combined resources and expertise," said Ghias Khan, Engro Corporation President and CEO.
Eelco Hoekstra, Chairman of the Executive Board and CEO of Royal Vopak, said this new step in our cooperation gives Vopak an excellent entry in the growing Pakistan LNG market. This fits very well our ambitions to grow and diversify our service offering in LNG."
