LNG terminal licence: Company to approach defence ministry, PQA for clearance
OGRA sets conditions before issuing licence for handling LNG imports.
Key objections raised by the stakeholders and interveners included a lack of prerequisite studies namely hydraulic, hazard and operability studies. PHOTO: FILE
ISLAMABAD:
The Oil and Gas Regulatory Authority (Ogra) has put on hold the process of issuing a liquefied natural gas (LNG) terminal licence until clearance from the Ministry of Defence and Port Qasim Authority (PQA) for use of its main channel.
The regulator has asked Elengy Terminal Pakistan Limited (ETPL), which is getting the licence, to get the go-ahead from the defence ministry and provide a no-objection certificate (NOC) for the use of jetties in PQA’s main channel for handling LNG imports, sources say. All other requirements including site studies have been met by the company.
Last year, the PQA refused to grant NOC to Fauji Oil Terminal and Distribution Company Limited (Fotco) and Engro Vopak Terminal Limited (EVTL) for handling LNG imports, saying they could be very dangerous and hazardous for the port, surrounding industrial installations and the population.
In a letter written on October 8, 2013, the PQA said it could not change its stance as the LNG Policy 2011 called for meeting all international safety standards. The widening of the channel near Fotco terminal would not achieve the minimum recommended safe passage as per international safety standards, it said.
The PQA believed that any release of large quantities of gas under the prevailing wind conditions was likely to have an impact on adjacent facilities.
“Now that the present government has reconstituted the PQA board, ETPL may get the final nod for the NOC,” a source said.
In a public hearing conducted by Ogra on March 25 in Karachi, the interveners were of the view that the regulator should not grant the licence unless ETPL came up with a fresh application for construction of a terminal in the LNG zone earmarked by the PQA.
A PQA representative, present during the hearing, said their board was recently reconstituted and it had yet to approve the construction of the terminal.
Key objections raised by the stakeholders and interveners included a lack of prerequisite studies namely hydraulic, hazard and operability studies.
The stakeholders were of the view that the LNG terminal in the vicinity of bulk and other terminals would be a safety risk having significant economic impact on existing businesses. Ogra suggested that these issues should be addressed by the PQA.
Despite repeated attempts to seek comments, ETPL CEO Imran Sheikh did not respond to calls.
Sui Southern Gas Company (SSGC) and ETPL have already finalised an LNG services agreement and the SSGC board has approved it subject to the condition that Pakistan State Oil (PSO) would provide a letter of comfort for payment of capacity charges.
The award of the contract is expected to pave the way for LNG imports from Qatar on the basis of a government-to-government deal. Earlier, Doha had asked Pakistan to first put in place an LNG handling facility before going for imports.
The government is stepping up efforts to bring first LNG supplies in the current calendar year and has assigned PSO the task to import gas from Qatar because of its sound financial position.
The terminal will handle 200 million cubic feet of LNG per day (mmcfd) in the first phase and 400 mmcfd in the second phase, which will begin next year.
Besides imports from Qatar, the government was also exploring the possibility of inviting tenders for LNG supply from private players. “Multinational companies like Royal Dutch Shell have expressed interest in arranging LNG supplies, which will be possible through floating tenders,” an official said.
Published in The Express Tribune, April 3rd, 2014.
The Oil and Gas Regulatory Authority (Ogra) has put on hold the process of issuing a liquefied natural gas (LNG) terminal licence until clearance from the Ministry of Defence and Port Qasim Authority (PQA) for use of its main channel.
The regulator has asked Elengy Terminal Pakistan Limited (ETPL), which is getting the licence, to get the go-ahead from the defence ministry and provide a no-objection certificate (NOC) for the use of jetties in PQA’s main channel for handling LNG imports, sources say. All other requirements including site studies have been met by the company.
Last year, the PQA refused to grant NOC to Fauji Oil Terminal and Distribution Company Limited (Fotco) and Engro Vopak Terminal Limited (EVTL) for handling LNG imports, saying they could be very dangerous and hazardous for the port, surrounding industrial installations and the population.
In a letter written on October 8, 2013, the PQA said it could not change its stance as the LNG Policy 2011 called for meeting all international safety standards. The widening of the channel near Fotco terminal would not achieve the minimum recommended safe passage as per international safety standards, it said.
The PQA believed that any release of large quantities of gas under the prevailing wind conditions was likely to have an impact on adjacent facilities.
“Now that the present government has reconstituted the PQA board, ETPL may get the final nod for the NOC,” a source said.
In a public hearing conducted by Ogra on March 25 in Karachi, the interveners were of the view that the regulator should not grant the licence unless ETPL came up with a fresh application for construction of a terminal in the LNG zone earmarked by the PQA.
A PQA representative, present during the hearing, said their board was recently reconstituted and it had yet to approve the construction of the terminal.
Key objections raised by the stakeholders and interveners included a lack of prerequisite studies namely hydraulic, hazard and operability studies.
The stakeholders were of the view that the LNG terminal in the vicinity of bulk and other terminals would be a safety risk having significant economic impact on existing businesses. Ogra suggested that these issues should be addressed by the PQA.
Despite repeated attempts to seek comments, ETPL CEO Imran Sheikh did not respond to calls.
Sui Southern Gas Company (SSGC) and ETPL have already finalised an LNG services agreement and the SSGC board has approved it subject to the condition that Pakistan State Oil (PSO) would provide a letter of comfort for payment of capacity charges.
The award of the contract is expected to pave the way for LNG imports from Qatar on the basis of a government-to-government deal. Earlier, Doha had asked Pakistan to first put in place an LNG handling facility before going for imports.
The government is stepping up efforts to bring first LNG supplies in the current calendar year and has assigned PSO the task to import gas from Qatar because of its sound financial position.
The terminal will handle 200 million cubic feet of LNG per day (mmcfd) in the first phase and 400 mmcfd in the second phase, which will begin next year.
Besides imports from Qatar, the government was also exploring the possibility of inviting tenders for LNG supply from private players. “Multinational companies like Royal Dutch Shell have expressed interest in arranging LNG supplies, which will be possible through floating tenders,” an official said.
Published in The Express Tribune, April 3rd, 2014.