Engro LNG terminal to resume partial gas supply on July 2

Aftab Ahmed

Engro Elengy (EETL)’s new LNG terminal FSRU-Sequoia will start a partial supply of gas on Friday that is likely to normalize by July 5, 2021.

Engro company has successfully completed the berthing of FSRU (floating regasification unit) Sequoia on June 30 as planned. The commissioning work is in progress and gas supplies from the terminal are likely to gradually resume from July 2.

Over the next few days, the supplies will be ramped up and are expected to be normalized by July 5 to help meet the country’s energy needs.

Earlier, the cabinet has decided that Engro should replace the LNG floating terminal in August in a bid to avoid the looming energy crisis. However, Petroleum Division had informed the prime minister that Insurance certificates of FSRU will expire on June 30 and therefore, no LNG ship would be ready to berth.

Following this, the government decided to allow for dry docking. However, it has led to a severe energy crisis as the power shortfall has touched the 10,000 MW mark.

Earlier, the Cabinet Committee on Energy (CCoE) on Friday had refused to allow Engro to replace the existing FSRU with a new one having higher regasification capacity due to the peak summer season.

Now, the cabinet committee on energy will meet on Thursday to take a decision in view of legal opinion.

The CCoE held a special meeting on last Friday to consider the request of Engro energy company to replace the existing LNG terminal FSRU with a new one floating LNG terminal. It had also met on Thursday to consider it but could not develop consensus due to objections of the Ministry of Maritime affairs.

The cabinet met on Friday to decide this as it is an emergency issue because the Engro energy gas company-EETPL agreement with the FSRU-floating LNG terminal is expiring on June 30.

The Engro gas company agreement with the existing floating LNG terminal provider is expiring on June 30 and therefore, it wants to replace it with another one that may be with a higher capacity of 900 mmcfd against the existing capacity of 650 mmcfd.

During the meeting held here, the Ministry of Maritime Affairs had objected that it was peak summer season and therefore it was not the right time for dry docking.

The Engro company has been urging the government to allow replacing the existing LNG terminal with a new one with a higher capacity of 900 mmcfd.

Earlier, SSGCL had signed an LNG services agreement (LSA) with EETPL to handle 400 mmcfd LNG. Later, SSGC also agreed with EETPL to utilize an additional capacity of 200 mmcfd. Meanwhile, National Accountability Bureau (NAB) had launched an investigation.

Keeping in view this situation, SSGC is not ready to allow allowing Engro for the replacement of the existing FSRU with a new one having a higher capacity of 900 mmcfd.

SNGPL raised concerns that it had already pre-locked the annual delivery plan for 2021 with power plants and the power division. Disruption in gas supplies resulting from the dry dock will attract capacity payments and liquidity damages from power division for non or undersupply of gas.

The officials said the power sector needs to revise the ADPs for GPPs downward for July to avoid capacity payments under Gas Sales Agreements (GSAs).In the case of non-revision of ADPs by power division and gas-based power plants, capacity payment and liquidity damages (LDs) shall be borne by SSGC and EETPL.

Excelerate, a US firm is an FSRU provider to Engro firm. It had been confirmed earlier that Class Society has declined any further extensions to the Dry Dock. The FSRU Exquisite cannot operate without a Dry Dock of engro LNG terminal beyond June 30, 2021.