Tuesday, July 5, 2022

Govt moving towards a new LNG terminal during the energy crisis

The government has decided to facilitate the replacement of a new LNG terminal with an existing one for maintenance, to avoid international litigation and probe the reasons behind the delay in taking decisions in managing contracts and correcting liabilities.

The Minister of Law has personally heard the views of nearly all stakeholders in the LNG supply chain, including public and private sector entities, on the matter, examined LNG Supply Agreements (LSAs) and related matters, and Detailed position would be presented to the CCoE (Cabinet Committee on Energy).

The CCoE meeting to be chaired by the Minister of Planning and Development Asad Umar would address two main issues – updates on LNG terminals and the North-South Gas Pipeline project – as well as review the implementation status of the closure of some old plants and a report on the LP G situation.

“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 docking of the Floating Storage and Regasification Unit (FSRU) since January 2019,” he said a high official.

Officials said the maritime affairs ministry is opposed to the dry docking of Exquisite as it is required for precautionary reasons and is likely to be delayed until August when demand is expected to decline over the Ashura holidays. However, it claimed that immediate release could only be allowed for corrective or emergency reasons, which was not the case.

The LNG pumping during this period would remain completely closed for two days and then gradually increase to 92 percent on the 7th day, ie July 5th.

600 million cubic feet per day of gas would not be available for just two days of the 3.8 billion cubic feet of total gas supply, but there was no agreement in place to operate 13 kiln oil plants with capacity payments.

The Petroleum Division said it could not supply less than 350mmcfd of LNG to three large power plants to avoid liquidity damage as firm demand from the power sector was 500mmcfd and the division was supplying 700mmcfd to plants despite the need might be bigger.

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