CCoE may suspend gas to LNG based fertilizer plants

Aftab Ahmed

Islamabad: The Cabinet Committee on Energy (CCoE) may approve the suspension of gas supply to fertilizer plants under the gas load management plan if it allows Engro LNG terminal for dry docking.

The CCoE in a meeting held on Thursday would discuss two options. The first option included disallowing the Engro LNG terminal for dry-docking till August 2021. Secondly, it will consider approving the gas load management plan if it allows Engro LNG terminal for dry docking.

Cabinet has already decided that the Engro LNG terminal should be allowed dry docking in August. However, it referred the issue to CCoE for the final decision that is meeting on Thursday.

Gas Load Management Plan

Petroleum Division has proposed RLNG and indigenous gas curtailment to different sectors including fertilizer to minimize the damage during dry-docking.

SNGPL

Under a gas load management plan, SNGPL may suspend gas supply up to 70 MMCFD RLNG to two fertilizer plants. It may also suspend RLNG supply up to 40 MMCFD to the CNG sector in Punjab. At present, two fertilizer plants are receiving LNG.

There is also proposed to suspend up to 70 MMCFD indigenous gas to the CNG sector in Khyber Pakhtunkhwa. SNGPL may use the spread volumes for system balancing and/or diversion to Power Plants, subject to charging of RLNG tariff (where agreement with a power plant for supply of indigenous gas is not available)

SSGCL

The gas utility may suspend RLNG supply up to 115 MMCFD RLNG to the non-export general industry in Punjab and KP.

It may further reduce the supply of RLNG to KE and supply of system gas, as saved from CNG/Non-export industry, may be provided to KE for meeting its demand

Background

SSGCL (Customer) has a commercial agreement with EETPL(Operator) for FSRU operations at Port Qasim since March 2015 Vessel is maintained under Classification Society ＂Bureau Veritas”（BV) certifications LNG Services Agreement (LSA) allows Operator to conduct Dry-Docking of FSRU after year 5 and year 10 of operations (during 15 years).

Dry-docking was due in March 2020 which got delay due to Engro·

The in-situ survey conducted by Class Auditors in March 2021 has warranted dry-docking Engaging another Classification Society to get a counter opinion is time-consuming and also requires dry-docking (only one week left).

In case of not proceeding for dry dock, the Operator is exposed to full and complete stoppage of all trading and commercial operation privileges No cargo will be willing to off-load into this FSRL with expired certifications Operator’s Rights and Obligations.

The operator has the right to take the vessel for dry-docking under LSA for recertification under Class Society.

PQA has already agreed for this facilitation in dry-docking vide letter dated 16th June 2021 ·FSRU “Exquisite” to be replaced with FSRU ＂Sequoia” which will be －fully functional.