Dutch giant buys 29% stake in LNG terminal for $31.4m

Becomes second Netherlands company to invest in Engro businesses in two years


Our Correspondent December 15, 2018
Engro has sold 24% and IFC has sold 5% shares in ETPL to Vopak LNG Holding BV. PHOTO: FILE

KARACHI: Dutch giant Royal Vopak has acquired 29% shareholding in Engro Corporation’s liquefied natural gas (LNG) import terminal - Elengy Terminal Pakistan Limited (ETPL) - at a price of $31.4 million.

“Engro and Vopak have completed the transaction in accordance with the share purchase agreement dated July 19, 2018,” Engro General Counsel and Company Secretary Faiz Chapra said in a notification to the Pakistan Stock Exchange (PSX).

“The corporation has sold 24% and IFC (International Finance Corporation of the World Bank Group) has sold 5% shares in ETPL to Vopak LNG Holding BV,” Engro said in a statement issued separately to the media.

In shift, Engro to bet big on rising middle class

Engro’s share price increased 4.14%, or Rs12.22, and closed at Rs307.13 with trading in 820,700 shares at the PSX on Friday.

The stake sale fetched $31.4 million in foreign direct investment (FDI) into Pakistan. In the previous fiscal year 2017-18, the country had received a total of $2.76 billion in FDI.

Royal Vopak has become the second Dutch company that has invested in Engro’s businesses within a short span of two years. Earlier, FrieslandCampina Pakistan BV acquired 51% stake in Engro Foods at a price of $446.81 million in December 2016.

“Engro will reinvest the sale proceeds ($31.4 million) in Pakistan’s economy,” a company official told The Express Tribune in July.

“Our investment strategy team is considering a wide variety of new businesses and new sectors for reinvestment…with focus on agriculture, renewable energy, digital and logistics technology,” he added.

Engro Corp’s profit surges 38% to Rs6.8b

ETPL’s wholly owned subsidiary, EETPL, owns an LNG facility at Port Qasim, adjacent to the Engro Vopak chemical terminal on the mainland side of the channel into the port.

The facility has been in operation since March 2015 and is the first LNG import facility in Pakistan. “It has re-gasified 590 billion cubic feet of gas since inception and has met all contractual commitments and obligations to date,” the statement added.

The facility consists of an LNG jetty including a 7.5km high-pressure gas pipeline. This pipeline is connected to the grid of EETPL’s sole customer Sui Southern Gas Company (SSGC), a government-owned entity.

EETPL holds a 15-year charter for a Floating Storage and Regasification Unit (FSRU). Gas is mainly used in power production for the growing population of over 200 million, industries and as feedstock for fertiliser production.

“Vopak and IFC have separately agreed that the remainder of IFC’s shares will be acquired by Vopak pending certain regulatory consents and approvals,” the statement added. “After completion of this transaction, the shareholders in ETPL will be Engro (56%) and Royal Vopak (44%).”

Published in The Express Tribune, December 15th, 2018.

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