Govt May Replace LNG Terminal to Prevent Energy Shortage and Litigation Crisis

The issue of the dry docking of the Engro LNG terminal has been a cause for worry for the government and customers alike for the past few weeks. This closure can lead to potential supply disruption and energy shortage in the country.

“There has been [an] exchange of more than 60 letters between the parties — Sui Southern Gas Company Limited ((SSGCL) and Engro Elengy Terminal Limited (EETL) — on dry docking of the Floating Storage & Regasification Unit (FSRU), since January 2019,” a senior official told a local media outlet.


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

Now, amidst this crisis, it appears that the government has decided to replace an existing LNG terminal in order to prevent the shortage. This is also being planned to avoid international litigation over the delays in managerial and operational decision-making, Dawn News reported on Thursday.

The Minister for Law will present a proposal in this regard to the Cabinet Committee on Energy (CCoE) in its meeting scheduled for today (Thursday, 24 June).

The report revealed that the proposals have been formulated with input from multiple stakeholders of the LNG supply chain, including public and private sector entities, and will put forth a detailed position on the LNG supply agreements (LSAs) and related matters.

The meeting of the CCoE will be presided over by the Minister for Planning, Asad Umar, and will deliberate on the updates on the LNG terminals and the North-South Gas Pipeline project. The implementation status of the closure of some old power plants and a report on the LPG situation is also on the agenda for the meeting.

The LMG terminal at Engro has already been given extensions for its dry docking schedule, necessitating its closure at the earliest to avoid any disasters, but some officials at the Ministry of Maritime Affairs are still of the opinion that it should be delayed until August when the demand comes down.

On the other hand, the inspectors of the Class Society concluded in their situ inspection of the FSRU in March that it is not possible to delay it beyond 10 July.


Sui Southern To Cut Supply Amid Worsening Gas Crisis

The Port Qasim Authority (PQA) had already allowed Engro on 16 June to replace the existing terminal with a new one. The pumping of LNG during this period will be paused for two days, and will build up to 92 percent gradually, the news report detailed.

According to the report, agreements for furnace oil and diesel are in place to make up for the shortfall over the next few days. They also said that as per the power sector’s demand projections no imports may be required in the short run.

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