ISLAMABAD: Minister for Energy Hammad Azhar said on Saturday that over 7000MW electricity shortfall owing to dry docking of Engro’s Floating Storage Regasification Unit (FSRU) and reduction in inflows at Tarbella will be bridged through alternate sources and diversions so that minimum load shedding is done.
Addressing a press conference, he said the government will conduct thorough investigation into dry docking of Engro’s FSRU and a legal course is being evaluated as to why the company did not give one-year advance notice before dry docking.
Explaining the current energy issue, he said, Pakistan has two LNG terminals, which were established during the PML(N) tenure, with both terminals requiring to be dry docked twice in 15 years. One terminal has opted for dry-docking because the international organization - Class Society - responsible to maintain overseas certifications of FSRU under international laws - made it clear that FSRU Exquisite must be sent for dry docking latest by June 30, 2021. The Excelerate, the US firm that owns FSRU Exquisite, has also confirmed that the vessel cannot be operated without Class Society certifications beyond the end of June.
He said, Engro's LNG Floating Storage Regasification Unit (FSRU) Exquisite, currently in use by Engro Elengy Terminal (EETL), will be replaced with a new vessel, FSRU Sequoia.
The Minister said that dry docking will take six days with only two days of zero output of gas from Engro terminal; in the remaining four days gas will start ramping up, i.e., supply will vary in these days.
The government is making alternate arrangements to deal with the gas curtailment situation from June 29, to July 5, 2021 (seven days) to bridge the gap by operating other power plants, he said, adding that the main reason for this challenge is due to 50 per cent less generation of electricity from hydel sources.
He said if unscheduled load shedding is necessary during these days, it will be minimal and targeted, adding that the government will manage it in a better way.
Azhar said this issue has been “sensationalized because the Opposition has nothing to do these days.” He said the charge that one gas field has been shut down is not correct. He said, during this period, maintenance of three or four gas fields were due which have been rescheduled for three weeks. However, one gas field, which is a big one, was scheduled for maintenance before the information on this dry docking of Engro's terminal was known as its maintenance was long due and there were apprehensions that it could cave in.
This field started maintenance on June 20 and its ramping up will start June 28 or June 29, which implies 80 per cent gas from this field will be available.
Hammad Azhar said, recently former Prime Minister of PML(N) has said, that furnace oil plants will be operated during gas curtailment period. He also claimed that he was offered billions of rupees by those who want furnace oil in power sector in place of LNG but he went for LNG.
Hammad Azhar contended that whenever dry docking will be done, furnace oil has to be used for power generation, either today or later. He said dry docking has to be done twice in 15 years which was written in a contract during PML (N) tenure.
“You did the deal and are now questioning it,” he replied to former PM Shahid Khaqan Abbasi’s allegation without naming him.
Responding to the objection on use of furnace oil, Hammad Azhar said in 2016-17, 30 per cent furnace oil (35,000-40,000 tons) was being consumed even after the commissioning of LNG plants whereas in 2017-18, use of furnace oil was 19 per cent. In 2018-19, when PTI took over the government it was 7.59 per cent, in 2019-20, 3.53 per cent and now in 2020-21, 4.4 per cent furnace oil is being consumed. Next year, consumption of furnace oil will be reduced further.
“Furnace oil consumption is less than 10 per cent vis-a-vis PML (N) government. Aren’t we justified in asking questions as LNG plants were established during the previous administration and during the tenure of the then PM 35000-40,000 tons of furnace oil was being consumed,” he continued.
Hammad Azhar asked the then Prime Minister not to engage in a false narrative.
The Minister said, at present there are three issues at the same time - reduction in inflows in Tarbela, dry docking and domestic gas.
In Sindh, a gas ‘crisis’ is due to maintenance of Kunar Pasaki field, which began prior to dry docking period of LNG terminal.
The Minister said, the Excelerate, the US firm that owns FSRU Exquisite, should have given a firm date of dry docking a year ago. SSGC claims that it was informed during first week of June 2021 whereas Engro’s counter claim is that it had informed SSGC in March 2021, adding that both dates were on very short notice.
“We will deal with the challenge in a better way,” he said.
He claimed the PTI resolved the issue of Karkey Rental Power Plant, renegotiated contracts with IPPs and saved billions of rupees.
He said grey listing of Pakistan by FATF and two assessments were done during PML (N) tenure and there were preparations for blacklisting Pakistan.
The PML (N) government contracted LNG at 13.3 percent of Brent while the PTI government at 10.4 percent of Brent, he said and added that the incumbent government helped saved Rs 500 billion if calculation is done on the basis of current price of Brent as compared to PML (N) deal.
In reply to a question, he said, the government will conduct thorough investigation into dry docking of Engro’s LNG terminal and legal course is being evaluated as to why the company did not inform a year before the dry docking. He said 600MMCFD of RLNG was being supplied to the power sector and 4000MW will be out due to non-availability of LNG and 3000-3500MW from Tarbela, but this does not mean load shedding will be of 7000-7500MW. He said maximum shortfall will be bridged by operating other plants and some diversions.
The Minister said that successes during the last two or two and half years were achieved and FATF President who was previously taking about blacklisting Pakistan, is now praising Pakistan.
He said, “this is Pakistan’s success,” adding that the remaining “very small” challenge will be completed in 12 months. He asked political opponents not to harm Pakistan’s interest.
Talking about energy sector, he said that opposition is “jobless” these days because of a “good budget” and better economic performance and dynamism in industry. According to the minister, “Opposition is in search of a narrative and they are not finding a narrative, they are creating a narrative.”
Copyright Business Recorder, 2021