PSO strikes deal with QatarGas to avoid demurrages

ISLAMABAD: The top management of Pakistan State Oil (PSO) has swung into action and managed to strike a negotiated deal with QatarGas (QG) ensuring deferment of five LNG cargoes by 1-2 days to avoid the huge demurrages amounting to $931,750 earlier expected by end of current month, a top official of Petroleum Division told The News.

“PSO was earlier left in the lurch and was facing the expected demurrages of $931,750 by end of current month as the rate of re-gasification of LNG, at Engro terminal, being imported from Qatar had massively slowed down exposing the state-owned oil marketing company (OMC) to demurrages and take or pay charges,” said the official.

The re-gasification rare was slowed down, he said, because of the line pack that crossed over 5 billion cubic feet (BCF) at one time against the red line of 4.6 bcf.

The line pack of over 5bcf means the pipeline carrying LNG can face untoward incident anytime. The cost of RLNG1 and RLNG2 pipelines stand at over $1.2 billion which can face any damage because of line pack of over 5bcf.

“The line pack increased because of the fact that power sector has reduced the LNG consumption to 130mmcfd as against its demand of 550mmcfd and more importantly RLNG consumption in the domestic sector is not jacking up.

Because of the low consumption by main consumers of RLNG, line pack increased to alarming level which led to slow re-gasification of LNG. And this has resulted in huge delay in offloading of LNG from vessels owing to which PSO was feared to be exposed to huge demurrages and take or pay charges as many LNG ships from Qatar were lined up as per the demand of Sui Northern,” said the official.