KARACHI: Pakistan’s second liquefied natural gas (LNG) re-gasification terminal at Port Qasim inaugurated by Prime Minister Shahid Khaqan Abbasi
a fortnight ago suffered a serious technical fault at an underground
pipeline, resulting in a failure to inject re-gasified LNG into the
system.
This may lead to the cancellation of a few lined-up cargoes over the next few weeks, industry sources told Dawn on Wednesday.
Two
ships carrying LNG were waiting for delivery at the floating storage
and re-gasification unit (FSRU) when the incident ruptured an underwater
pipeline while building gas pressure from LNG from the third shipment.
Insiders
said this puts a question mark on the quality of the FSRU and the
associated infrastructure, including the pipeline network. They said the
initial testing should have been completed at least 50 per cent higher
pressure i.e. above 1,500 pounds per square inch (PSI). The pipeline
suffered the setback below 1,000 PSI.
The second LNG terminal has been developed by a
consortium led by Pakistan Gas Port Ltd (PGPL). Fasih Ahmed,
spokesperson and one of the directors of PGPL, did not respond to phone
calls and questions for comment.
A source working close
to PGPL’s FSRU said the gas leak incident was so serious that an
emergency mechanism was put in place. It would need a minimum of 10-15
days to reach the stage where it faced the problem and again build the
gas pack pressure.
He said a number of other shipments
would also be deferred, cancelled or diverted. Authorities concerned
were in talks with suppliers for an acceptable way out in the interest
of long-term contracts or else they would be compelled to declare force
majeure. The challenge can create gas shortages amid increasing winter
demand. Many towns in Punjab were already facing gas pressure problems.
The
prime minister inaugurated the re-gasification unit on Nov 20 that was
already delayed for almost six months. PGPL and state-owned entities are
fighting liquidity damages imposed by Pakistan LNG for the delayed
commissioning through arbitration even though the prime minister had
supported PGPL’s position.
The government had been
postponing shipments of LNG secured in January through a competitive
bidding from Gunver and ENI because of the infrastructure shortfalls. It
had already delayed LNG cargoes for October originally planned for
July.
The LNG shipment from the second terminal was
expected to be fed to three mega LNG-based power projects in Punjab –
Bhikki, Balloki and Haveli Bahadur Shah – of 1,200-megawatt each.
“Under
the agreement, June 30 was the commercial operation date (COD), which
is yet to officially take place and has been delayed further,” an
official said.
Mr Abbasi had himself ordered the COD to be delayed until September.
A
PGPL spokesman had earlier attributed the delayed COD to the inability
of the state-run entities to complete a small 400-metre government-owned
pipeline.
Under the agreement, the contractor of the
second terminal is liable to liquidity damages at the rate of about
$272,000 for each day of delay beyond June 30.
The
consortium led by PGPC had won the contract through a competitive
bidding at terminal charges of about 42 cents per million British
thermal units last year compared to 66 cents for the first terminal of
Engro, which recently revised the rate to 47 cents per unit for total
supplies of 630 million cubic feet per day.
