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Govt eyeing alternate options as LNG provide disruption appears imminent

by Pakistan Latest News Update

ISLAMABAD: As one other main provide disruption of liquefied pure fuel (LNG) looms giant, the federal government is on the lookout for legally protected and commercially viable alternate options to permit continuation of ‘larger replacement regasification terminal’ at the moment working in Port Qasim as a fait accompli to keep away from main energy shortfalls and have better fuel availability throughout winters.

Engro Elengy Terminal Restricted (EETL) has instructed the federal government entities that resulting from change of its Floating Storage and Regasification Unit (FSRU), there will likely be full disruption of regasification course of for 60 to 90 hours between Sept 7 and 11. EETL had taken out its unique FSRU, Beautiful, on June 28-29 for unavoidable upkeep and changed it with a comparatively bigger ‘replacement terminal’, Sequoia, inflicting LNG disruption for a number of days.

The EETL has been asking the federal government and Sui Southern Fuel Firm Restricted (SSGCL) for the previous few years to permit a bigger ship to exchange Beautiful to reinforce its regasification capability, with further capability for personal gross sales to different LNG customers.

Due to ongoing investigations by the Nationwide Accountability Bureau (NAB) and associated instances in courts on account of capability enhancement from 400 to 600 million cubic ft per day, the SSGCL and petroleum division had been resisting such a permission that’s not a part of the unique service or provide agreements.

A significant setback to fuel provides twice and that too in summer season ends in poor public picture of a political authorities, an official mentioned.

The scenario on floor, nonetheless, is that EETL has given two choices on an instantaneous foundation.

“Complete regasification stoppage for 60 hours (causing 1.6 billion cubic feet gas shortage)” in case the Beautiful Vessel comes again LNG laden or 91 hours (2.445 BCF scarcity) in case it returns unladen.

Sui Northern Fuel Pipelines Restricted (SNGPL) has already raised ‘red flags’ that it had agency downstream agreements with three main LNG-based energy crops of about 4,000mw as per pre-approved Annual Supply Plan (ADP) primarily based on again to again consultations with all provide chain companions, together with deliberate terminal outages.

Drop in RLNG to those energy crops apart from ADP are legally handled as non-supply and contain heavy capability funds and liquidity damages.

On prime of that, two fuel fields of about 100mmcfd would even be occurring annual flip round within the second-third week of September. The choice gas — furnace oil and diesel — is just too costly and attracts public criticism throughout public hearings on gas price changes by the ability regulator. However on the opposite aspect, the liquidity damages due to non-supply of LNG pile up on the 2 fuel firms — SSGCL and SNGPL.

A senior official mentioned the federal government wanted further LNG terminal capability to fulfill larger demand in winters that exist with the 2 terminals however not contracted. On this regard, about 150mmcfd capability is accessible within the second terminal of Pakistan Gasport and one other 150-180mmcfd in case of Engro’s alternative vessel Sequoia. Nevertheless, it drops to 60mmcfd in case of Engro’s unique Beautiful terminal.

“We want to tap this entire available capacity of about 300mmcfd, preferably in the public sector but also in the private sector,” he mentioned.

The precedence, nonetheless, is to safe this extra capability that’s by no means disadvantageous to the federal government, its entities or the general public at giant, and is “legally permissible, commercially viable and not restricted by any court order”. Meaning the re-gasification tariff ought to go down.

Revealed in Daybreak, August 16th, 2021

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