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Closure of Engro’s LNG Terminal to be Decided in 3 Days

After taking the opinion of the Law Division, the Cabinet Committee on Energy (CCOE) will decide whether to delay the shutdown of the Engro LNG Terminal or to continue operations, within 72 hours, the Secretary Petroleum, Dr. Arshad Mehmood, informed a local media outlet.

The issue pertains to the dry docking of the FSRU (Floating Storage Regasification Unit) for six to eight weeks at the Engro Elengy Terminal Private Limited (EETPL).

This is the standard process of the LNG terminals, whereby the FSRU is taken to the service yard and brought to dry land. This is done to clean and inspect the submerged portions of the hull. Dry docking is essential as a preventative measure and is also a regulatory requirement within the industry.

This particular terminal had been given extensions thrice until March 2021, which means that the risk of any mishap is much higher now if dry docking is not carried out. Furthermore, after 30 June, the current FSRU at the EETPL will not have any insurance cover and, therefore, will not be able to sail.

The FSRU at the EETPL needs dry docking twice in 15 years, the first of which was due in 2019 but has not been so far, Mehmood stated.

However, the docking of the unit means that the LNG terminal will not be functional for at least a week. This may also lead to supply disruptions as this terminal supplies nearly 10 percent of the total gas across the country.

Under these circumstances, the EETPL is seeking to replace the current FSRU (Exquisite) by the FSRU (Sequoia), while the Petroleum Division is focused on ensuring coordinated efforts to manage risks and mitigate supply chain disruption.

The Petroleum Division will re-pitch the summary to the CCOE which is scheduled to meet tomorrow (Tuesday) to suspend the re-gasification process on the terminal for two days. The re-gasification will start remapping up and will increase to 100 percent in the next five days under this proposal by the Petroleum Division.

If the dry docking process is initiated, the supply chain may be disrupted. In that case, the supply of RLNG will continue to power plants and export industry, but the CNG, fertilizer, and non-export industries will have reduced supplies for a week or so.

Under the gas load management plan, the stock of furnace and diesel has been arranged to meet the electricity demand.

On the other hand, if the dry docking is postponed to August, the government will receive significant relief, as the maximum hydrogenation will be available in August and it will be easy for the government to close the Enrgo Terminal for a week.

The Petroleum Secretary said that the CCOE will take input from the law division and legal teams of stakeholders such as the EETPL, the SSGC, the PLL, PSO, the SNGPL, and the OGRA.

Source: Pro Pakistani

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