LaHORE -  The Sui Northern Gas Pipelines Limited (SNGPL) board of directors (BoDs) on Thursday approved a capital intensive project for development of 1200mmcfd LNG pipeline.

The project cost is estimated at Rs111 billion and is expected to be completed by October 2018, says a notice sent to PSX.

This will be the second LNG pipeline being constructed from Karachi to Lahore that will be used to import an additional 1200mmcfd of LNG gas to bridge demand gap in Pakistan. SNGPL will be constructing the portion of pipeline from Sawan to Lahore. It is to be noted that the first LNG pipeline is expected to be completed by the end of FY17.

This project is approved by the board but is subject to approval by Oil & Gas Regulatory Authority (Ogra) and arrangement of the government backed financing. This will serve as a huge positive for the company as company earns a fixed 17.5 percent return on its operating assets and capex.