LASMO and National Power, both of the UK, are understood to be in negotiations with the government concerning plans to develop a liquefied natural gas (LNG) import project, industry sources say. The two companies signed a memorandum of understanding with the government in early 1996 to develop the project. They have now completed a feasibility study and submitted it to the government, the sources say. Final approval for the project from the government may take up to six months (MEED 5:4:96).

The project is expected to include an LNG purchase agreement with an as yet unidentified supplier and a gas sales agreement with the government. The gas distribution network is operated by state-owned companies Sui Northern Gas Pipelines and Sui Southern Gas Company.

The prequalification and bidding process for construction work is also likely to start after government approval for the scheme is received. The project would include an import terminal, a re-gasification plant and a power station. If the work is let under a single engineering, procurement and construction contract, bids are likely to come from groups of companies, rather than a single contractor, industry sources say. The construction period would be about three years.

Finance for the project is expected to include substantial commercial debt with National Power and LASMO taking equity portions. The financial adviser for the $1 million feasibility study was the US' Citibank.