The planned first shipment of imported Liquefied Natural Gas (LNG) from Qatar will reach Karachi Port on March 29 against planned date of March 26 today (Thursday), sources said.
Sources privy to the developments told Business Recorder here on Wednesday that shipment was expected to face much delay, but authorities in Islamabad pressed Port Qasim Authority to complete the work on required channel draught as early as possible and depute Pakistan Coast Guard on the security of the terminal as well as shipments. Sources said "following the development on the part of higher authorities the shipment will now enter Pakistan's maritime limits on Thursday and will remain there for three days. In the meanwhile, PQA will develop the required channel depth of at least 13 meters and the shipments will reach on March 29; and on March 31 it will be re-gasified. After re-gasification the imported LNG will be injected into Sui Southern Gas Company (SSGC) network from where it will further be transported to Sui Northern Gas Pipelines (SNGPL) network, which will supply it to the selected private power producers".
Qatargas is providing LNG to Pakistan at the rate of $8 to $9 per Million British Thermal Units (MMBTU), according to sources.
Sources said the PQA authorities are demanding $1.2 million for each cargo ship of LNG which is too high as compared to international standards as in Nigeria it costs $0.75 million, in Qatar $0.125 million and in India even lower.
Officials said "concerns over the specifications of the terminal were raised by Qatargas with the Port Qasim Authority (PQA) at a meeting on March 9. Qatargas officials said a series of steps was required to be completed by PQA as soon as possible for making terminal accessible". A depth of at least 13 meters is required throughout the channel in the long term to handle big cargos ship, but PQA has a channel depth of around 12 meters which will make movement of large ship impossible, sources added.
Currently, a high-level technical Qatari team is in negotiations with the government of Pakistan to give the LNG deal final touches. It will be announced in the next few days, sources said.
Engro Corporation's subsidiary Engro Elengy Terminal Limited (ETPL) has completed an LNG terminal at Port Qasim at a cost of $135 million. If the planned import of LNG shipment did not reach Karachi on March 31, 2015, the government would be liable to pay the capacity charges $272,000 per day for not utilising the ETPL.
PQA should have completed the channel depth earlier starting with the Maashal project in 1996, but Port Qasim isolated itself from the fast track tendering process and sought a grant from GoP for tug boats and desired to charge higher rates for its services for LNG carriers.
Qatargas, PQA and the Operators were also part of the safety studies carried out in the UK last year by Llyods Register on use of flexible hoses for Ship to Ship Transfer. They have reviewed a compatibility analysis and mooring studies and are comfortable. The terminal basis of design review has also been undertaken by Qatargas and their Operators and it is inherently designed to handle an FSRU up to 173,000 m3 with a QMax LNGC alongside; however, the current plans and approvals will support accommodating a Q-Flex.USNFPA 59A standards meeting safety standards at the terminal and FSRU through procedural safety system.
Moreover, Ministry of Interior has to provide security at PQ by the requisite agencies with Pakistan Coast Guard co-ordinating security arrangements with PQA.
The USAID has actively supported the project by facilitating the hiring of consultants and training of stakeholders to enable Pakistan to import energy to meet its increasing demand. The FSRU (Floating Storage and Re-gasification Unit) vessel, according to shipping experts, is a carrier as well as a floating plant or refinery.
"Normally, an FSRU is a land based terminal worth a billion dollars. The chartering of a floating unit, however, has made it economical for us," viewed Muhammad A. Rajpar, former chairman of Pakistan Ships' Agents Association. Dubbing it a new "feather in the cap" of Port Qasim, the expert said the price of an FSRU ship is $ 300 million on international market.
The long-awaited M/v Exquisite, however, would not be berthed on its arrival. "They (Port Qasim Authority) say the berthing would take place on 29th (March)," Shaikh Imranul Haq, CEO Engro Vopak Terminal Limited (EVTL), told Business Recorder.
Even if this small and relatively lower draught, 11.2 meters, commissioning vessel is berthed and handled at Port Qasim, the fate of bigger ones to follow is unclear.
The Government of Pakistan and the state-run Qatargas are reported to have failed to finalize a long-term Sale Purchase Agreement (SPA) for LNG imports, thanks to an ill-prepared Port Qasim Authority (PQA) which is yet to materialise its claim of ensuring 13-meter draught in its navigational channel.
"The channel is not ready," said a source privy to the port's operations. Another source revealed that initially PQA had claimed to guarantee 13-meter draught at its channel for the deeper-draft LNG vessels.
However in January, the port operator reported to the Qatargas a draught not up to the required level. "They attributed it to the monsoon season vowing to dredge the channel sooner than later," the source said.
To the utter surprise of Pakistan's Qatari trading partners, however, the PQA in its latest (March) report again has notified less-than 13-meter draught at some areas of its channel. "This concerns the Qatargas who wants PQA to materialise its earlier commitment," said the source.
M/v Exquisite is the low-draught FSRU ship which Qatargas is using as a one-time facility to bring the 150,000cbm commissioning cargo under a Master Sales Agreement (MSA). "Once signed the Pak-Qatar SPA would see bigger vessels of 215-220cbm capacity," the source said.
To accommodate such deeper-draught ships the PQA would be required to ensure 13 meters draught in its channel.
While PQA Chairman Agha Jan Akhtar did not return his repeated calls, Director General Operations Captain Noman Hassan confirmed that the LNG ship was due today. The PQA official said while "their" (Qatargas) requirement was 11.3 meters, the port had recently been handling ships of a draft as deep as 13 meters. "We just handled a ship of 12.9 meter draft and 330 LOA (length overall)," Hassan said.
All the Qatari suppliers of LNG wanted, the official said, was extra precaution. He, however, hinted that the foreigners were concerned about the tide which does not remain static.
"Their requirement is the tide which keeps moving. We think it is safe," said the DG, adding LNG ships, in their construction, are different from others. "These are wider and slow. Their sizes, shapes and speeds are different. So we have to stay extra cautious," Hassan said.
While PQA is not, Engro's jetty, as Shaikh claimed, after its successful commissioning, was ready to accommodate the LNG vessel. "We have filled gas in the pipelines on 550 PSI (pounds per square inch) pressure," said EVTL's chief.
Once docked, he said, the FSRU vessel would reprocess and push the imported LNG forward to the Pakland Cement plant's metering station through a 31-kilometer long supply pipeline laid by EVTL and SSGC.
LNG would then go to the Sawan metering station to be swapped with SNGPL which would further supply it to customers in Punjab.
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