Engro Corporation plans to expand its power generation business and build a second liquefied natural gas terminal, betting a revival in economic growth will boost demand for electricity.
The Karachi-based company is looking at the possibility of constructing a 400 to 600 million cubic feet a day LNG terminal, through a partnership, for private sector companies, a statement quoted Chief Executive Officer Khalid Siraj Subhani as saying on Tuesday.
It also plans to build a 450 MW LNG-fueled power plant for as much as $700 million, he said. Engro is also looking to invest overseas in energy and fertilizer after the firm sells stakes in existing businesses, he said.
“The idea is to keep expanding; there is a strong desire,” Subhani said in Karachi, Pakistan’s commercial capital.
“There are so many elements we are working on, how they will materialise, it depends; but the shift will happen toward energy.”
Engro is seeking to turn an energy crisis in South Asia’s second-largest economy into an opportunity as the government of Prime Minister Nawaz Sharif pushes to end shortages within two years. The nation is adding power plants with the help of Chinese investment and started importing gas last year with Engro building the nation’s first LNG terminal.
This year Engro’s shares have risen 20 per cent, outperforming the 8 per cent gain of Pakistan’s benchmark index, the best performer in Asia after stake sale announcements. That is despite the company’s 2015 annual 4.7 per cent rise in revenue, the slowest rate in seven years.
“Fertilizer business is becoming increasingly more challenging,” said Muhammad Asim, chief investment officer at MCB-Arif Habib Savings and Investments Ltd that handles 66 billion rupees in stocks and bonds. “Power will provide it that stability and potential to build up further.”