Pakistan is likely to face massive gas loadshedding very soon

ISLAMABAD: The country will probably after the 5th-6th Faced with massive gas depletion due to the expected closure of the Engro LNG terminal on Sept. 30, 2021 if the government does not maintain the new Sequoia floating storage regasification unit (FSRU) with a regasification capacity of 780 mmcfd.

And the government’s failure to keep the new FSRU will also result in a maximum gas release in the winter season as it cannot utilize the FSRU Sequoia’s additional 180mmcfd capacity, said a senior official who attended the Aug. 19 meeting participated in Islamabad by using additional available capacities at both LNG terminals.

The meeting participants also discussed the worst scenario of the closure of the Engro LNG terminal that will occur after the government’s failure. During the winter season, demand climbs up to 5 bcfd (billion cubic feet per day) while the country’s local availability of processed gas has shrunk by as much as 2.8 bcfd. The government can import 1.2 billion cubic feet under the state guarantees based contracts, but if it manages to use the additional 330 million cubic feet capacity of existing FSRUs at Engro and PGPCL (Pakistan Gas Port Consortium), the PTI will -Government to be able to cope with the decreased intensity of the gas crisis that will hit the country in the coming season.

Prime Minister Imran Khan wants to use the additional capacity of both terminals to avoid political backlash in the winter season due to the massive gas crisis expected in the coming winter season.

Government officials are showing resistance to obtaining additional capacity from the Engro LNG terminal due to fears of NAB, and to this end the Petroleum Division has written a letter to NAB asking for the additional capacity of both LNG terminals to be used will. And if the NAB does not respond in a timely manner, the government cannot keep the new FSRU at the Engro LNG terminal.

The government intends to use Sui Southern to procure additional capacities for the new FSRU at the Engro LNG Terminal. However, the management of the PGPCL terminal would like to use 150 mmcfd in a private-to-private model and is not interested in selling it to PLL (Pakistan LNG Limited).

Senior gas company officials said on contact that if the 780mmcfd FSRU is not maintained, the old Exquisite FSRU, which will enter Pakistani waters on 28, will replace the existing FSRU.

In order to complete the exchange process and make the old FSRU fully functional, the Engro LNG terminal will have to be closed for three days, which will remove around 680 million cubic feet of gas from the country. During the said three days, the government will have no choice but to shut down supplies to the export, non-export, CNG and fertilizer sectors and there may be less gas being supplied to the domestic supply sector in some areas of the country.

After three days, however, the imported gas delivery will partially take place and on the sixth or seventh day the LNG terminal will be fully operational.

However, Engro Terminal company’s sources say talks with the government about keeping the newly installed FSRU are ongoing and further talks are expected this week which will help clarify the future scenario. They said the government was asked to either remove the new FSRU by 30/6 from Qatar.

When asked if Engro would make sure to bring the old FSRU with LNG from Qatar in order to reduce the gas crisis in the country, he said it depends on PSO, which has an agreement 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 clerk sent a question to the PSO spokesman: “The old FSRU of the Engro LNG Terminal will replace the existing one on May 5-6. Replace September if the government does not keep the existing one. In this scenario, how many days will the country face a decline in gas supply? And how high will the deficit be for imported gas? And if the FSRU berths at the terminal with RLNG volumes after dry docking, how much gas deficit will remain for the transition period? “

The spokesman replied, “It is too early to talk about the failure of the negotiations as discussions are still ongoing. However, in the case of an FSRU replacement, the maximum decrease in the regasification rate would be 3 to 4 days. In our opinion, however, this can be managed through load management. That corresponds to only 50,000 tons of heating oil consumption. Technically it would be the same as replacing the FSRU in dry docking, but at that time the electricity demand for gas was very high and has now dropped by 150 to 200 mmcfd. “

Petroleum Division officials said the country will have four days of blast furnace oil to be used to generate electricity when the Engro LNG terminal closes. However, independent experts believe that during the shutdown, the government can request to use the additional 150 mmcfd capacity at the PGPCL terminal and also to arrange the arrival of old FSRUs with LNG from Qatar gas crisis during the transition period of 6-7 days.

Originally published by The National News

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