ISLAMABAD: Officials at the Prime Minister Office (PMO) had
another reason to celebrate on Monday as a critical project for the
import of natural gas finally began operations after a long period of
delays and technical difficulties.
Pakistan started
receiving about 1200 million cubic feet per day (mmcfd) of imported
liquefied natural gas (LNG) into the system, just as the prospect of
severe shortages loomed over the country during the crucial winter
months. The gas started flowing on Monday into the second LNG
re-gasification terminal at Port Qasim.
“We started
receiving about 400mmcfd of RLNG from the second terminal on Sunday and
were able to boost supplies to 600mmcfd by now,” a senior official at
the PMO told Dawn. This marked a long awaited ramp up in the
country’s depleting domestic gas resources and accounted for almost 30
per cent of the total gas supplies ahead of peak winter demand.
Pakistan
is currently producing about 4 billion cubic feet (bcf) of natural gas
against a constrained demand of more than 6bcf. The domestic gas is
priced at about slightly more than half of what import LNG is costs.
The
official said the second LNG terminal completed by Pakistan Gas Port
Ltd (PGPL) originally started injecting gas into the national grid on
Friday but the key junction operated by Sui Southern Gas Company (SSGC)
at Port Qasim to receive imported gas collapsed and caused disruption
not only from PGPL terminal but also from Engro terminal.
After
almost eight hours of disruption in imported gas supply, the RLNG from
both terminals was finally restored, gradually reaching to a peak 1.2bcf
on Monday, helping to plug a crucial deficit at a critical time.
“It
was the most opportune time to have additional gas supplies flowing to
the system in the last week of December when winter demand was peaking
and hydropower generation ebbed to a low because of annual canal
closures”, said an upbeat official of the PMO.
He said
the Engro terminal was currently injecting about 600mmcfd of LNG from
Qatargas and PGPL processing 600mmcfd supplied by ENI.
The
official confirmed that managing director of the Pakistan LNG Terminals
Limited – a government-owned company – Azam Soofi was called to the PMO
and asked to resign two weeks ago. He, however, said the botched
removal of Mr Soofi by PLTL board of director was not for posting
penalties on PGPL for delayed terminal commissioning but his inability
to see through the delay despite repeated explanations sought by the
PMO.
Mr Soofi was sacked about 10 days back but stayed by
the Islamabad High Court. The official said Mr Soofi had first agreed
to resign but backtracked until removed by the board of directors (BoD)
and stayed by the court.
He said Mr Soofi had secured a
Rs4 million monthly salary through the BoD, but had failed to arrange
LNG commissioning cargo for the PGPL terminal and never committed a
commissioning date and instead always reported work in progress at the
terminal in terms of percentages. The commissioning cargo was ultimately
arranged by the PMO.
On top of that, Mr Soofi also
failed to get wet calibration tests of the terminal and the pipeline
network and could not arrange LNG buyers for the first cargo. In fact,
the official said Mr Soofi prevailed upon top PGPL management to request
the government not to remove him.
Responding to a
question, the official confirmed that PGPL had been facing commissioning
delays from the very beginning but the company blamed the PLTL for
delaying Standby Letter of Credit (SBLC) required under the contract. He
said the dispute with a local company over $300,000 per day of penalty
could have attracted $100 million in international penalties from the
LNG suppliers.
The official said government priority was
to secure LNG into the system by December 30th to meet surging gas
demand and avoid higher international penalties. Disputes with local
companies for penalties could be fought any time given time consuming
court processes, he said while answering another question.