The federal government has reportedly barred Port Qasim Authority (PQA) from allocating "unsafe" site to any company for establishing an LNG floating terminal, well informed sources told Business Recorder. M/s Elengy Terminal Pakistan Limited (Engro Fitama Shelll) and M/s Energas (Lucky group-Sapphire Hallmore) are showing an interest in site B only for the development of LNG floating terminal due to cost advantage.
PQA is a statutory body which is governed under the Port Qasim Authority Act, 1973 and section 70 of the Act states that all acts and proceedings of the Board shall be subject to the control of the Federal Government who may modify or suspend any such acts or proceedings. The sources said Port Qasim Authority has given its land for the establishment of two LNG terminals ie 1st LNG terminal by Engro Elengy Terminal (pvt.) Limited (EETPL) and 2nd LNG Terminal by Pakistan Gasport Consortium Limited (PGPCL).
According to sources, PQA had forwarded Board Resolution of December 06, 2017 which relates to the allocation of site B by PQA to two competing consortiums ie (M/s Elengy Terminal Private Limited and M/s Energas) for developing LNG floating terminal on the location (site B) which was declared unsafe earlier. Both are eager to get the site due to cost advantage.
The sources maintained that at first the request of M/s Elengy Terminal Pakistan (pvt) Limited was turned down for establishment of LNG floating terminal at the site due to the reason that the Quantitative Risk Assessment (QRA) studies conducted through D'Applonia (Consulting Engineering Services) by M/s Elengy Terminal Pakistan (pvt) Limited showed that the risk of collision is higher for site B, since this site is more exposed to main channel vessel traffic.
This observation was also supported by Port Qasim Authority consultant M/s Ramboll-Sofregaz who further explained that site B was considered too close to the turning circle and pilots have advised not to opt for it, therefore, this site is declared unsafe both by M/s Elengy Terminal Pakistan Limited consultant D' Applonia as well as Port Qasim Authority consultant M/s Ramboll-Sofregaz.
The sources further stated that as both consortiums, ie, M/s Elengy Terminal Pakistan Limited (Engro Fitama Shelll) and M/s Energas (Lucky group-Sapphire hallmore) are showing an interest in site B only for the development of LNG floating terminal due to cost advantage, PQA Board decided to give the preferred location to the consortium that will be offering a higher royalty and oilier economic sharing which includes guaranteed throughput, timely completion of terminal and penalties in failure with Port Qasim Authority via open scaled bidding from these two companies.
PQA argued that as the site was earlier declared unsafe, proposing that until the site B is clearly declared safe for the establishment of LNG Floating Terminal, Port Qasim Authority may not give this site to any company. The Authority further proposed that whenever site B is declared safe for the establishment of LNG floating terminal, Port Qasim Authority may allot this site as per PPRA Rules, 2004 via an open competitive bidding instead of a bidding between two companies.
The ECC in its recent meeting considered the issue of allocation of site to private LNG developers for establishment of LNG Terminal and decided that only those sites at Port Qasim would be allocated for the establishment of LNG floating terminal which have been declared safe after undertaking Quantitative Risk Assessment.