Port bottlenecks threaten oil supply chain, OCAC warns

KARACHI: The oil sector has identified bottlenecks at the ports, which are impacting the already fragile supply chain of petroleum products and proposed for separate line for petrol, streamlining the berthing standard operating procedure (SOP) and improvement in the night navigation for fully loaded vessels.

The Oil Companies Advisory Council (OCAC), a representative body of the oil industry, in a detailed letter to the Ministry of Energy- Petroleum Division (MEPD) and the Ministry of Maritime Affairs (MoMA) said that the Fauji Oil Terminal & Distribution Company Limited (FOTCO) in collaboration with the Port Qasim Authority (PQA) commenced night navigation of oil vessels at the FOTCO terminal, a move that will increase FOTCO’s handling capacity by 30 percent.

However, it is worth noting that no further action has been taken in this regard. In July 2022, FOTCO installed separate headers for furnace oil at the jetty and motor gasoline (Mogas) at P1 in order to address the contamination issues at the jetty due to single header for white and black oil.

OCAC identified the issues, creating hurdles (such as congestion especially during peak season, longer vessel turnaround time, shifting of vessels to Karachi Port Trust (KPT) which compromises white oil pipeline (WOP) throughput, etc.) and impacting the already fragile supply chain. These issues are non-availability of additional jetty, non-availability of night-time navigation results in the vessel occupying berth even after completing discharge, air/nitrogen pigging at the cost of oil marketing companies (OMCs), non-availability of dedicated line, each for Mogas and high-speed diesel (HSD) and channel widening for liquefied natural gas (LNG) vessel movement.

Oil body said that a meeting was convened by PQA/ MoMA, MEPD, Oil and Gas Regulatory Authority (OGRA), FOTCO and OCAC on May 5, 2023 to review the SOP of OCAC regarding vessel berthing. In the light of minutes developed subsequent to the meeting, OCAC has been regularly sharing the laycan planning at FOTCO with MEPD and OGRA, but to no avail.

“It is unfair to berth any out-of-turn vessel based on notice of readiness (NOR) when a vessel arriving within the laycan is made to wait for its turn thereby incurring unnecessary demurrages to the OMC. It is worth mentioning that a meeting was also convened by the Secretary Maritime Affairs with Secretary Petroleum Division, Chairman PQA, Director General Oil, Chief Executive Officer FOTCO on May 30, 2022 to discuss the situation at FOTCO,” the letter said.

The meeting was also joined by OCAC and Pakistan State Oil (PSO) upon the request of MEPD. It was discussed that a sustainable solution is investment in a separate line for MS and night navigation of fully loaded vessels. In the said meeting, Secretary MoMA instructed FOTCO/PQA to proceed with a new jetty and full-fledged night navigation including empty and loaded vessels, as partial night navigation serves no purpose. MoMA also shared that widening and deepening of channel is the direct responsibility of MoMA. MEPD requested MoMA to play its part in widening and deepening of the channel in order to proceed with at least one option to facilitate the oil industry.

The oil body sought the support for engaging PQA to facilitate FOTCO for effective jetty utilization in the wake of ongoing agri season by laying a separate line for MS, streamlining the berthing SOP and making night navigation a continuous service.

This will also enable FOTCO to optimally utilize their jetty/port thereby avoiding supply chain disruptions and heavy demurrages on the industry.