Home Gas effect The closure of the Engro LNG terminal causes a massive gas crisis

The closure of the Engro LNG terminal causes a massive gas crisis


ISLAMABAD: The country is likely to face massive gas outages after September 5 and 6 due to the planned closure of the Engro LNG terminal if the government fails to keep the new Floating Regasification Unit (FSRU) Sequoia, with a regasification capacity of 780 mmcfd, by August 30, 2021.

And the government’s failure to keep the new FSRU will also result in maximum gas offloading during the winter season as it will not be able to use the additional 180 mmcfd capacity of FSRU Sequoia, said a senior official who attended the meeting held. August 19. in Islamabad on the use of additional capacity available in the two LNG terminals.

The meeting participants also discussed the worst-case scenario of closing the Engro LNG terminal that is expected to emerge after the failure of the government. During the winter season, demand soars to 5 billion cubic feet per day (billion cubic feet per day) as the country’s local availability of treated gas has declined to 2.8 billion cubic feet per day . The government can import 1.2 billion cubic feet per day under contracts based on sovereign guarantees, but if it manages to use the additional capacity of the existing FSRUs at Engro and PGPCL (Pakistan Gas Port Consortium) which is rising to 330 million cubic feet per day, the PTI government will be able to manage the reduction in the intensity of the gas crisis that will hit the country over the next season.

Prime Minister Imran Khan, he said, wants to use the additional capacity of the two terminals to avoid political backlash during the winter season due to the massive gas crisis expected in the upcoming winter season.

Government officials are resisting to obtain additional capacity from Engro’s LNG terminal due to NAB fears and to this effect, the petroleum division has written a letter to NAB asking for their consent to use the gas. additional capacity of the two LNG terminals. And if NAB has not responded in time, then the government will not be able to retain the new FSRU at the Engro LNG terminal.

The government wishes to acquire the additional capacity of the new FSRU at the Engro LNG terminal via Sui Southern. However, the management of the PGPCL terminal wishes to use 150 mmcfd on a private to private model and is not interested in selling it to PLL (Pakistan LNG Limited).

Senior gas company officials contacted said if the FSRU of 780mmcfd was not retained, the former FSRU Exquisite which left Pakistani waters on June 28-29, 2021 for Qatar for drydocking would return to them. September 5 and 6. will replace the existing FSRU.

In order to complete the replacement process and make the old FSRU fully functional, the Engro LNG terminal will have to be closed for three days, which will deprive the country of approximately 680 mmcfd of gas supply. During these three days, the government will have no choice but to shut off supply even to the export, non-export industry, CNG and fertilizer sectors. sector.

However, after three days, the imported gas will be partially supplied and on the sixth or seventh day, the LNG terminal will be fully operational.

However, sources from the Engro Terminal company say that talks with the government on keeping the newly installed FSRU are not over and that more talks are expected this week, which will help shed light on the future scenario. They said the government had been asked to keep the new FSRU by August 30, if it really wanted to source the additional 180mmcfd capacity, and if not, the old FSRU having the maximum capacity of 660 mmcfd will arrive by September 5th. 6 from Qatar.

When asked if Engro would make sure to bring the former FSRU filled with LNG from Qatar to alleviate the gas crisis in the country, he said it was up to PSO which has a deal with the Qatar Gas Company. However, the Engro official said the terminal will be closed for three days when the old FSRU arrives and the existing one leaves the terminal.

This scribe sent a question to the spokesperson for PSO, asking, “The old FSRU from Engro LNG Terminal will replace the existing one on September 5 and 6 if the government fails to keep the existing one.” In this scenario, for how many days will the country face a drop in gas supplies. And what will be the volume of the deficit in imported gas. And if the post-dry dock FSRU with RLNG volume is docked at the terminal, then what will be the gas deficit for the transition period? “

The spokesperson replied: “It is too early to comment on a failure of the negotiations because the discussions are still ongoing. That said, in the event of replacement of the FSRU, the maximum reduction in the regasification rate would be 3 to 4 days. However, in our opinion, this can be handled by load management. This equates to 50,000 tonnes of fuel oil consumption alone. This would technically be the same as when the FSRU was replaced during the dry docking, but at that time the electricity demand for gas was very high and has now dropped from 150 to 200 mmcfd.

Officials from the petroleum division, when contacted, said the country had heating oil for four days, which will be used for power generation when Engro’s LNG terminal is closed. However, independent experts are of the opinion that during the shutdown, the government can request to use the additional 150 mmcfd capacity available at the PGPCL terminal and also organize the arrival of the old FSRU filled with LNG from Qatar, claiming that these two steps will reduce the gas crisis during the 6-7 day transition period.