Pakistan's $31 Million Gas Plant Contract Goes to Texan Companies

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Researched by Industrialinfo.com (Industrial Information Resources Incorporated; Houston, Texas) the contract to set up a $31 million LPG-NGL extraction plant in Pakistan has been awarded to Hanover Compressor Company (NYSE:HC) (Houston, Texas) and Hanover Compression DR. The implementation agreement, signed in Houston for the Jamshoro Joint Venture Ltd (JJVL) by the state owned Sui Southern Gas Co SSGC), covers the construction and commissioning of the plant at Jamshoro in the Sindh province of Pakistan. SSGC is setting up the project on a BOO (Build, Own, Operate) basis.

The plant, which will be commissioned by the end of September 2004 will process 200 MMscfd of natural gas and produce over 400 tons a day of LPG and 90 tons a day NGL. The LPG output from the plant represents around 40% of the country's current production. The new plant's production will result in a foreign exchange saving of $38 million a year and will add $4.36 million per annum in royalties to SSGC's revenue. SSGC is an integrated natural gas transmission and distribution company that handles over 1.2 billion cubic feet of natural gas per day and supplies over 1.6 million customers in Sindh and Balochistan provinces. The company has recently embarked on a five year, $593 million expansion project which will increase its gas handling capacity to 1.8 billion cubic feet per day and increase its customer base to over two million.

The increased production of LPG will ease the current shortage of LPG in Pakistan. In remote areas where natural gas is not available, the LPG will provide an alternate and environmentally clean fuel. Gas for the project is being purchased on a long-term sales agreement from BP's Badin resource in Pakistan.

The plant's technology is being licensed from Ortloff Engineering, the Midland, Texas subsidiary of Elkcorp (NYSE:ELK) (Dallas Texas). The state of the art Turbo-Expander Score-based technology will recover about 99.4% of propane and essentially 100% of butane.