SNGPL disconnects gas to CNG, Cement, Fertilizer
Aftab Ahmed
Sui Northern Gas Pipeline Limited (SNGPL) announces to disconnect the gas supply to LNG-based fertilizer plants, cement, CNG, and nonexport industries from June 29 due to dry-docking.
The gas load management plan will be applicable from June 29 to July 5, 2021.
It is to inform you that regasification from EETPL (Terminal-1) will be disrupted during the period from 29th June 2021 to 5th July 2021 due to unplanned dry dock activities, SNGPL said.
In order to manage the gas loads during the said period and pursuant to the Minutes of the Meeting of 09.06.2021, issued by DG (LGs), it is requested that all regions please advise the
The following:-
Suspend gas/RLNG supply to the country’s CNG, cement, and non-export industrial sectors.
The franchised area of SNGPL (including Punjab & KPK), as decided in the consultative meetings with the Ministry.
It is pertinent to mention that the physical disconnection of all consumers is critical. Otherwise, the impact of the reduction will be minimized.
It announced an immediate ramp down of RLNG supply to M/s Agritech and M/s Fatima Fertilizer. As agreed in the meeting, we will reach zero consumption at 0000 hrs midnight today, it said.
Earlier, the Cabinet Committee on Energy (CCoE) on Thursday failed again to develop a consensus on allowing Engro to replace the existing LNG terminal for dry docking.
Earlier, the Cabinet Committee on Energy (CCoE) on Friday last 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 body on energy on Thursday took a matter for a decision. However, it could not take any decision in this regard following observations SNGPL had raised regarding the gas crisis and financial obligations.
SNGPL had conveyed that it had agreements with Power plants and therefore, it would have to face damages if it fails to provide gas for electricity generation.
Sources said that the Petroleum division had also informed that the entire burden would pass on Pakistan State Oil (PSO) to provide furnace oil.
The oil company had already floated a tender for furnace oil import but it had to cancel it due to a higher price of Rs 120,000 metric tons.
Officials said that PSO had floated a tender again.
Petroleum Division had tabled two options before cabinet body on energy whether to allow Engro to replace its LNG FSRU or approve gas load management plan. However, the cabinet body on energy noted that there would be a severe energy crisis if it allows Engro to replace FSRU.
The Engro was due to replace FSRU in March 2021 when the demand for gas was not high. However, it delayed that resulted in crisis now.
Read More: Oil terminals’ illegal licenses: PD sacks DoE officials
The CCoE held a special meeting last Friday to consider the request of Engro energy company to replace the existing LNG terminal FSRU with a new 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.
Read More: ETPL to set up first onshore LNG terminal
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.
Read More: SNGPL to provide gas to fertilizer Plants amid gas crisis
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.
