OCAC warns of congestion at Karachi ports

Says entire energy supply chain may be disrupted due to unavailability of Oil Pier-1


Zafar Bhutta June 01, 2021

ISLAMABAD:

The Oil Companies Advisory Company (OCAC) has warned that congestion at Karachi ports may disrupt the entire energy supply chain.

Sources revealed that the OCAC had cautioned of disruption in oil supply due to the issue of ports (KPT and FOTCO Jetty at PQA) congestion due to unavailability of Oil Pier-1 (OP-1) at Keamari Terminal in Karachi.

The oil industry body, in a letter to Petroleum Secretary Dr Arshad Mahmood, stated that Karachi Port Trust (KPT) requires all the importers and agents to submit an ‘indemnity bond’ prior to berthing of vessels for absolving KPT from the claims and liabilities, which may arise due to the compromised condition of OP-1.

“It is important to mention that preventive maintenance of all the oil piers while ensuring its operational availability is the sole responsibility of KPT, however, in this instance, it is surprising to note that KPT instead of maintaining oil pier in operational and safe working condition, is shifting the responsibility to importers, agents, ship owners by asking for an indemnity bond for unforeseen events,” OCAC said.

Read more: Oil trades near $70 a barrel on improving demand outlook

It further warned that this requirement from KPT would have far reaching negative impact in the ‘international shipping market’ with limited availability and increased freights when arranging vessels for delivery in Pakistan.

The body added that contrary to this request, KPT should be providing assurances for safe berthing operation and indemnify all importers and vessel owners in case of any untoward happening due to the depleted condition of oil piers.

OCAC further said that it is pertinent to note that OP-1 is in a deteriorated condition, which is being used for berthing in day light only and has been in and out of service every now and then. Oil Pier 3 (OP-3) has been out of operation since July 2018.

Hence, its commissioning after necessary repairs needs to be expedited on urgent basis so as to avoid queuing up of vessels and associated demurrage costs. In this direction, we have written series of letters highlighting ‘port constraints’ at KPT for early resolution, OCAC said, adding that, on behalf of downstream petroleum companies (refineries and oil marketing companies), it would like to raise this issue of critical importance, which can disrupt the import supply chain of petroleum products in the country.

It urged the Petroleum Division to take up the matter with the Ministry of Maritime Affair for urgent resolution. In this regard, Byco Petroleum has come up with a proposal to connect its Single Point Mooring (SPM) with the White Oil Pipeline via Asia Petroleum Limited (APL) pipeline for berthing of oil ships.

In a letter sent to the energy minister, the Byco management said that supply chain infrastructure for POL can be significantly expanded by connecting Byco’s SPM with the White Oil Pipeline via Asia Petroleum Limited (APL) pipeline.

Published in The Express Tribune, June 1st, 2021.

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