CCOE may allow closure of Engro LNG terminal for dry docking today

ISLAMABAD: The Cabinet Committee on Energy (CCOE) meeting being held on Tuesday (today) is most likely to approve Engro LNG terminal closure from June 29 to July 5, 2021.

The decision is likely in the wake of dry docking of Floating Storage Regasification Unit (FSRU), named as Exquisite, as the existing FSRU would have no insurance cover after June 30 and no vessel carrying LNG would come to the said LNG terminal.

However, the government wants to pend the dry docking till August as in that month maximum hydro generation would be available to the country. The government is of the opinion that in the month of June, increase in gas load shedding resulting in fuelling power load shedding will create a difficult position for it and it will not be able to face the wrath of masses.

However, the US embassy’s top officials have also geared up their endeavours and met top man of the government some 6-7 days back seeking dry docking on time and they also held meetings with Federal Energy Minister Hammad Azhar on Monday and raised the issue of dry-docking of existing FSRU (Exquisite) that will be replaced by FSRU (Sequoia). The new one will be having the capacity to re-gasify 900 mmcfd. However, the government cannot get more beyond 600 mmcfd gas from the said LNG terminal even if Engro LNG terminal manages another FSRU with capacity to regasify LNG of 900 mmcfd

“The Law Division has firmed up its opinion on dry docking either from June 29 to July 5, 2021 or in month of August but its secretary wants more input from the law minister that will be shared with energy minister today (Tuesday) before meeting of CCOE,” one of the top officials of Energy Ministry told The News.

However, sources claimed that the Ministry of Energy is ready for the worst scenario under which, in case the CCOE approves closure of Engro LNG terminal today with input from the Law Division from June 29-July 5, 2021. They said that the Energy Ministry has prepared an adjustment plan with multiple dimensions with regard to availability of gas and fuel that include the availability of furnace oil and diesel. “We have worked out a 12 per cent shortfall in gas availability when the Engro LNG terminal will go non-operational. We have local gas, dedicated gas and RLNG to provide gas. The dedicated gas will continue to be provided to power plants. RLNG and natural gas will continue to be provided to RLN based power houses and export Industry. However, the non-export industry, CNG and fertilizer will face hard times only for seven days. In case of closure of Engro LNG terminal, there will be complete shut down for two days and new FSRU will be able to regasify LNG by up to 92 per cent in the seventh day.

The Ministry of Energy has also completed its preparations to have a reasonable stock of furnace oil and diesel which is currently lying with IPPs, OMCs and refineries. In addition PSO has also been asked to import the required amount of diesel to ensure the required electric power generation which will be impacted because of non-availability of 600 mmcfd RLNG in the wake of dry docking.

The sources said that hydro generation is also going down because of massive dip in water flows in all rivers that include Indus, Jehlum and Chenab rivers. The coal based power plants and nuclear power plants are also generating electricity not up to the mark. “The less power through hydel, coal and nuclear will be attributed to the non-availability of 600 mmcfd LNG in the days to come.”

However, the Maritime Affairs Ministry has already opposed the summary of the Petroleum Division and recommended the LNG operator—should be penalized for violating the terms and conditions under LNG Engro Elengy Terminal Private Limited (EETPL) Services Agreement and jeopardising the country’s energy security. It also says that as and when dry dock replacement is done, it is the terminal operator's job to bring the vessel in an operational condition.