ISLAMABAD: The dry-docking activity at Port Qasim is expected to remain completely halted for two days starting from June 30, 2021, due to replacement of Engro’s exquisite vessel with vessel Sequoia but supplies will be normalised over the next four to five days, well-informed sources told Business Recorder.
The PSO and the PLL (Pak LNG Ltd) have indicated that some spot cargoes, along with the expected higher hydel output, will support gas load management for the power sector and the export industry.
The planned dry docking of LNG Floating Storage Re-gasification Unit (FSRU) Exquisite, currently in use by Engro Elengy Terminal (EETL), by June 30 is in accordance with the supply agreement with the SSGC and unavoidable under international laws.
The dry dock shutdown can be for more than three months, however, the replacement ship would enable for re-gasification services to resume within three to four days, the official added.
The vessel Sequoia, arranged by the EETL at its own cost and risk, is expected to reach Pakistan on June 26.
The company has assured all stakeholders that Sequoia is a more capable and efficient vessel, with a re-gasification capacity of 780 MMCFD, that will meet all performance obligations under the agreement.
The EETL, which has been in discussion about dry docking with the SSGC and all relevant government stakeholders since October 2019, notified them about updates on the dry dock activity on March 30, 2021, after a survey report issued by the Class Society – responsible to maintain overseas certifications of FSRU under international laws - made it clear that FSRU Exquisite must be sent for dry docking latest by June 30, 2021.
The Class Society had already extended the certifications twice due to the Covid-induced disruptions that led to port shutdowns and unavailability of experts.
Excelerate, the US firm that owns FSRU Exquisite, has also confirmed that the vessel cannot be operated without Class Society certifications beyond the end of June. Since the March notification to stakeholders, namely the SSGC, the SNGPL and PSO, the EETL held multiple meetings to seek their cooperation and flexibility to update the annual delivery plan to accommodate the dry dock activity.
Under the agreement, the annual delivery plan is non-binding and changes in the plan are an operational norm to ensure coordination among all stakeholders for any contingency planning.
However, no progress was made as the SSGC feared exposure to Liquidity Damages (LD) from the SNGPL for any disruption in gas supplies.
Therefore, the SSGC continued to resist change in the annual plan to allow for the mandatory dry dock activity to maintain class certificates and as required under the LSA as well.
As the deadlock persisted, the matter was escalated to the Ministry of Energy and, subsequently, it was put forward before the Cabinet Committee on Energy (CCoE).
Engro Elengy and the operators of Exquisite had made their best efforts to coincide the vessel replacement with shutdown already planned by the gas companies for August.
In previous engagements, the stakeholders had never raised any concerns about dry-docking around the end of June as long as the LD from the SNGPL was waived off to the SSGC, which was an inter-ministerial matter, the sources continued.
Under the agreement with the SSGC, the FSRU is required to dry dock twice over the 15-year period.
The dry-docking period is counted as shutdown days and the prior notification to all stakeholders was given to ensure adequate planning for the country’s energy needs.
Copyright Business Recorder, 2021
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