Dry-docking: SSGC hits back at CEO Engro for Misleading
Aftab Ahmed
Sui Southern Gas Company (SSGC) has hit back at Engro Corp CEO for concealing facts about its LNG terminal in Pakistan to shift its onus on the gas utility and alleged for misrepresenting the facts in the entire case.
SSGC claims that Engro had failed to carry out the drydocking activity of LNG terminal and caused a delay leading to a crisis in Pakistan.
In a statement issued here, SSGC has reacted to the recent statement of ENGRO Corp CEO related to the issue of dry docking of EETPL Terminal.
SSGC at the outset completely has rejected the statement of the EETPL CEO and stresses that EETPL has been misrepresenting the facts, by misinforming the print and electronic media on the issue simply to conceal their own faults, procedural lapses, and deviation from a contract signed between two commercial entities and to shift the entire onus on SSGC, which in itself is quite unethical.
This LSA entitles EETPL, in the capacity of being the Operator, the provision of sending the FSRU on dry-dock twice during a contract period of 15 years. It must be mentioned here that in accordance with the requirement of LSA, EETPL was required to inform SSGC regarding the dry dock activity of 2021 not later than July 1, 2020, which EETPL did not submit in a timely manner and not even informed in the Annual Delivery Program (ADP-2021) meeting of stakeholders held in October 2020.
In October 2019, EETPL informed SSGC regarding the dry-dock schedule which was being planned for May 29, 2020, till July 13, 2020, and agreed upon by all stakeholders during the ADP meeting for the year 2020.
However, in February EETPL informed that due to challenges in ensuring availability of shipyards and bridging FSRU, the planned dry dock activity will now commence no sooner than June 30, 2020.
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In this instance, SSGC requested EETPL to plan such crucial activities keeping in view the fact that LNG/ RLNG supply chain is critical due to back to back commitments, that can trigger serious financial implications including taking or pay/demurrages on upstream and downstream liabilities on the stakeholders, in case of even a small deviation from the plan.
Furthermore, SSGC requested SNGPL and PSO to share their comments on the matter to which SNGPL responded to ensure adherence to the already agreed EETPL outage schedule of ADP-2020 for avoiding any operational/financial risk.
In April 2020, EETPL informed that it had pushed dry dock to the first week of September 2020 due to COVID-19, resulting in lockdowns and travel embargos across the globe, which it once again postponed in August 2020 till the 1st week of September 2020.
In October 2020, during the ADP meeting, EETPL informed stakeholders not to carry out dry-dock in 2021, instead it will carry out only the Class Society In-Situ on one of the FSRU tanks in April 2021. Therefore, the Annual Programme 2021 was developed by stakeholders considering no Dry Dock activity in 2021.
From Aug 2020 till March 2021, EETPL remained silent on the issue of Dry Dock activity of FSRU Exquisite, and no updates were provided to the stakeholders except for the in-situ inspection of the FSRU tank during the ADP-2021 meeting. This, despite the fact, SSGC had on two occasions via emails in December 2020 and February 2021, requested EETPL the update on the Dry Dock/ Ship Classification Society Survey of the latter’s FSRU. However, EETPL preferred to remain completely silent on the issue.
On March 30, 2021, all of a sudden EETPL informed SSGC the provisional date for dry dock activity is to fall no later than 30th June 2021.
After receiving the first official notification from EETPL regarding the dry dock activity, SSGC proactively requested EETPL to share relevant information for submission to other stakeholders in the supply chain, more so since there will be no supply of RLNG volumes from EETPL during the shutdown period and will majorly affect the already agreed ADP-2021 profile and thus the gas load management plan.
Read More: SSGC asks Engro to delay FSRU dry docking until August
Thus since in order to proceed with this untimely and unplanned activity, consent of all stakeholders especially SNGPL and Qatar Gas was crucial in nature, therefore, SSGC requested SNGPL and PSO to provide its valuable input/ comments on the schedule of Dry Dock activity, keeping in view the scheduled ADP-2021 and RLNG requirement.
In response, both Pakistan State Oil and SNGPL advised about carrying out the dry dock activity of LNG terminal during the already planned 84 hrs outage window of 16 to 19 August 2021, in order to avoid rescheduling.
In May 2021, SNGPL informed that it had already locked its ADP with GPPs for the year 2021 while there is immense demand for power for June and July 2021 being peak summer months. Hence, it is not possible for SNGPL to agree on a reduction in supply volumes during the proposed period.
Therefore, SNGPL once again requested to stick to the already agreed ADP plan of 2021 and schedule dry dock activity in August or during any lean demand period. The same stance was once again communicated by SNGPL in mid-June wherein they cited their inability to accede to unscheduled dry dock activities especially from June 29 2021 to July 05, 2021, in peak demand season.
During the above-mentioned period, SSGC continuously pursued EETPL for adherence to applicable LSA clauses related to but not limited to Dry Dock for LNG terminal in Pakistan, FSRU substitution and acceptance test, etc. which EETPL is somehow reluctant to address to date and is in breach of the contract.
Furthermore, SSGC informed EETPL a number of times about the peak demand season and repercussions which EETPL ignored.
It is also important to mention here that EETPL never offered to carry out Dry Dock activity of LNG terminal in Pakistan during Eid holidays in any of their formal/informal correspondence with SSGC. In fact, in the past ADP meetings, EETPL had remained reluctant and turned down the requests of all stakeholders in the supply chain including SSGC, to schedule their shutdown activities during the Eid holidays, being the low demand period.
It is apt to mention here that the EETPL LNG terminal went on an 84 hours planned outage in Pakistan as per agreed ADP-2021 from March 21 till March 24, 2021, during which they could have easily addressed the requirement for FSRU dry docking, yet they failed to do so.
Moreover, SNGPL needs to submit the tentative outage schedule of the EETPL LNG terminal for the year 2022 for the finalization of the Annual Production Plan as per Power Purchase Agreements.
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EETPL has shown a non-serious attitude. SSGC has continuously pursued the matter of drydocking of an LNG terminal in Pakistan with EETPL since May 18, 2021, for the submission of a tentative terminal outage plan for the year 2022. They will further finalize in the ADP-2022 meeting.
To date, EETPL has not provided any information for onward submission, which will ultimately cause a delay in the finalization of the Annual Production Plan of GPPs. EETPL’s assertions are clearly a misrepresentation of facts that SSGC has asserted in this clarification.
