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2nd LNG Terminal – Profit by Pakistan Today

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Tag: 2nd LNG Terminal

  • CCoE bars import of imported furnace oil for three months

    CCoE bars import of imported furnace oil for three months

    ISLAMABAD: An investigation has been commenced by the Cabinet Committee on Energy (CCoE) on Wednesday regarding contravention of economic merit order of use of fuel in power plants.

    It barred the import of furnace oil for a period of coming three months.

    The CCoE was presided over by the Minister for Petroleum Ghulam Sarwar was apprised the 2nd LNG terminal was operating at less than its optimal capacity since power plants were operating on furnace oil instead of liquefied natural gas (LNG) which cost less and contravened the merit order.

    Also, it was told the power sector had demanded 800 mmcfd of LNG but utilized only 230 mmcfd and the Power Division shared the figures of the fuel being used for power generation by plants.

    The CCoE instructed the Power Division to share more details about the utilization of different fuels in power plants.

    In response, the Power Division said power plants had been utilizing furnace oil and not LNG, which was less costly fuel.

    But the Power Division contended domestically produced furnace oil should be utilized by power plants instead of costly imported fuel.

    Hence, the CCOE barred the imports of furnace oil and directed domestically produced furnace oil be utilized in power plants.

    The Power Division apprised the committee that furnace oil was being utilized to stabilize fuel supply and in the last few months it was being used by power plants rather than LNG.

    This happened even though the 2nd LNG terminal was operating at half its capacity and consumers were paying full capacity payment.

    Electricity being produced by power plants using furnace oil costs Rs12 per unit against Rs9 per unit which is an Rs3 per unit differential, resulting in burdening consumers with billions of rupees.

    Consequently, the committee on energy reached the conclusion that must-run power plants should be run in order of merit and instructed the Petroleum and Power Division to plan the import and consumption of LNG.

  • Second LNG terminal resumes operations, helps to plug critical gas deficit in winters

    Second LNG terminal resumes operations, helps to plug critical gas deficit in winters

    ISLAMABAD: Beset by troubles since its inception, the second LNG terminal at Port Qasim, Karachi has got fixed and over 400mmcfd of supplies were received on Sunday, which was ramped up to 600mmcfd by Monday, said government officials at the Prime Minister Office (PMO).

    The second LNG terminal has been beset by controversy since its inauguration in November by Prime Minister Shahid Khaqan Abbasi. It had developed a fault, following a gas leak in the insulation joint linking the facility to the connecting pipeline infrastructure.

    Since then three gas leaks in total had been found, delaying repair work at the facility, an industry source had said.

    Currently, Pakistan’s gas demand is over 6 billion cubic feet (BCF) and it produces around 4 bcf, resulting in deficit of around 2 bcf. The price of domestically produced natural gas is a touch above than half of what imported LNG costs, reported Dawn.

    The restarting of second LNG terminal has come at just the right juncture, as winter sets in and prospects of gas shortage around the country will rise with a drop-in temperature.

    The restarting of operations at the 2nd LNG terminal means that total supplies of LNG from both terminals including the one owned by Engro stands around 1,200 MMCFD.

    It was reported second LNG terminal owned by Pakistan Gasport Limited (PGPL) had started injecting gas into the national grid on Friday, but key intersection operated by Sui Southern Gas Company (SSGC) at Port Qasim to receive imported gas broke down.

    This not only caused stoppage at PGPL terminal but also at Engro terminal, said the official.

  • Pakistan’s LNG imports will keep rising, fuel demand to halve by 2020: Report

    Pakistan’s LNG imports will keep rising, fuel demand to halve by 2020: Report

    LAHORE: S&P Global Platts survey of several companies has revealed Pakistan’s rising LNG imports will contribute to fuel demand halving by 2020, the study predicted.

    Four brokerage houses, Topline Securities, Optimus Capital Management, Intermarket Securities in conjunction with S&P Global Platts shared their forecasts for Pakistan’s fuel consumption and demand.

    State-owned oil marketing giant and nations largest fuel oil importer, Pakistan State Oil (PSO) was also surveyed for this study.

    As per the report, fuel oil demand is expected to fall from 9.6 million mt in financial year 2016-17 to roughly 4.5 million or less by FY 2019-20.

    Fuel imports are likely to tumble as Pakistan switches to coal for power generation purposes. Projects under China-Pakistan Economic Corridor are coming online, like Sahiwal coal-fired power plant and the one recently inaugurated at Port Qasim, Karachi.

    Although, the country’s fuel mix for power generation is still dominated by furnace oil, but that will be change as several LNG-fired power projects in Punjab like Havelian, Balloki etc. come online.

    Also, thirst for rising LNG imports can be assessed from the opening of PGPL’s second LNG terminal at Port Qasim, Karachi which was inaugurated to much fanfare in November by Prime Minister Shahid Khaqan Abbasi.

    In October, PM Abbasi ordered phasing out of power plants dependent on expensive furnace oil for generation and be converted to gas as soon as possible in view of the availability of ample gas for the power sector.

    This stirred the hornets’ nest as pandemonium hit the oil and gas sector, and created a power crisis as plants suddenly went offline at start of November. Not only did it cause major impediments for oil refineries across the country, but created headaches for PSO which had ordered several shipments of the commodity for power-generation purposes.

    Then in third week of November it was reported that a ban on imported furnace oil was under consideration by the government due to topped up storages and supply challenges. The miseries compounded further as Byco was forced to shut down its refinery capable of producing 120,000 tons of oil due to low lifting of high sulphur furnace oil (HSFO).

    In an ironic twist, the newly inaugurated 2nd LNG terminal developed technical faults in early-December, crippling the energy supply chain and exposing the inadequate planning on part of the government’s energy managers.

    The pot kept boiling as overstocking of furnace oil created shortage of jet fuel used by aviation aircrafts and the Pakistan Airforce. PSO said it had forwarded more than five warnings to petroleum ministry regarding forthcoming dry-outs at airports which could force Civil Aviation Authority to declare NOTAM.

    And governments expected you-turn didn’t take long to materialize, as earlier this week it was reported they had agreed to lift imported and domestic furnace oil for power plants to ease jet fuel crisis considering problems at 2nd LNG terminal.

    This decision would allow easing of pressure on refineries which have been on verge of shutdown due to non-lifting of furnace oil and crippled production of JP1 and JP8 fuel for aviation industry and the airforce.

    S&P Global Platts survey said “”We were forecasting overall fuel oil demand to witness flat growth from fiscal year 2018 to fiscal year 2020,” said Umair Naseer, head of research at Topline Securities.

    “But given the government’s resolve to utilize LNG for upcoming power plants, we now forecast fuel oil sales to decline from around 8 million mt in FY2018 to 4 million mt in 2020,” he added.

    Furthermore, “We were forecasting overall fuel oil demand to witness flat growth from fiscal year 2018 to fiscal year 2020,” said Umair Naseer, head of research at Topline Securities.

    “But given the government’s resolve to utilize LNG for upcoming power plants, we now forecast fuel oil sales to decline from around 8 million mt in FY2018 to 4 million mt in 2020,” he added.

    Pakistan’s LNG demand is estimated to increase over next five years, with “Pakistan LNG estimating unconstrained demand at 30 million mt/year, or 4 Bcf/day of gas equivalent, by 2022, which is half of the country’s total gas demand projection of 8 Bcf/d for that year, according to government estimates,” read the S&P Global Platts report.

  • PGPL to try flowing gas through 2nd LNG terminal today

    PGPL to try flowing gas through 2nd LNG terminal today

    ISLAMABAD: Pakistan GasPort, the country’s second liquefied natural gas (LNG) import terminal, plans to try injecting gas back into the facility’s onshore system on Thursday after a leak forced a shutdown last week, two sources said.

    The newly inaugurated terminal suspended operations last week following a gas leak in the insulation joint linking the facility to the connecting pipeline infrastructure.

    Since then three gas leaks in total had been found, delaying repair work at the facility, a Pakistan-based industry source said.

    Pakistan GasPort initially said the terminal would be back in operation on Dec. 8.

    A senior Pakistani official said he expects LNG stored inside the floating storage and regasification unit to begin to be converted into gas and injected into the onshore system on Thursday, Dec. 14.

    The industry source confirmed this.

    On Wednesday, the 138,000 cubic metre capacity Al Jassasiya LNG vessel berthed alongside the GasPort terminal, according to ship-tracking data. Data shows the vessel is carrying cargo.

    Industry and trade sources said at least two LNG tankers have been cancelled or diverted away from the terminal since the leak.

    Pakistan GasPort owner Associated Group (AG) did not respond to an emailed request for comment. AG’s chairman Iqbal Ahmed is also chairman of Pakistan GasPort.