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ISLAMABAD: The Petroleum Division has reportedly proposed conversion of FOTCO to a purely furnished products/fuels jetty and shifting of condensate/naphtha export vessels to Keamari (KPT), official sources told Business Recorder.

Pakistan imports around 19 million tons of crude oil and petroleum products annually. All these imports are planned at the two ports at Karachi i.e. KPT and PQA/FOTCO.

However, oil industry has highlighted various port constraints being faced by them, which result in wastage of time, delays in berthing of vessels and consequent incidence of demurrage.

FOTCO jetty at Port Qasim has a designed capacity of 9 million tons per annum.

However, for the last two years, it handled 4.2 and 4.9 million tons respectively, almost half of its design capacity, yet at the same time importing Oil Marketing Companies (OMCs) incurred demurrages to the tune of $ 9.7 million (about Rs 1.5 billion) during FY 2019-20 though oil industry has adequate storage capacity at PQA. It may be noted that FY 2019-20 is not a true reflection of demurrages impact due to depressed demand and reduced imports as a result of Covid-19 and slowdown of economy.

The oil industry has done some further analysis with an objective to quantity the impact of factors such as non-availability of night navigation, intermix handling monsoon season, traffic of LNG vessels and many other miscellaneous factors which are currently impacting discharge capacity resulting in handling of much lower tonnage. It is evident from the analysis that FOTCO is able to handle 6 million tons/120 vessels on annual basis with a single jetty which is below the supply chain requirements of the industry and the country.

PARCO/PAPCO have completed their multi-grade movement projects, whereby petrol would also be transported through pipeline in addition to diesel. Presently, petrol is predominantly handled at KPT. Commissioning of multi-grade movement, which is in progress, would necessitate diversion of import handling of about 2.5-3.0 million tons per annum from KPT to FOTCO/PQA, as the pipeline initiates at PQA. However, this would result in higher demurrages at the expense of OMCs as well as causing foreign exchange drain due to the discharge constraints at FOTCO/PQA.

Similarly, the oil industry has also raised some integrity and maintenance issues at Oil Piers (OP) 1, 2 and 3 at Keamari Port. Presently, all three oil piers at KPT are operating at partial capacity mainly due to issues of loading arms and required repairs. The fully operational and well- maintained oil piers are vital for efficient marine receipt operations translating into improved product availability, efficient oil pier operations and avoidance of demurrage/forex losses for the country.

In order to have effective management/maintenance of oil supply/logistic chain, Petroleum Division has proposed that Ministry of Maritime Affairs may be directed to initiate/ensure the following steps/actions in consultation with the respective port authorities on a fast-track basis: (i) FOTCO may be converted to a purely finished products/fuels jetty. Accordingly, condensate/Naphtha export vessels may be shifted from FOTCO/PQA to Keamari/KPT; (ii) a dedicated tanker discharge line from FOTCO jetty to White Oil Pipeline may be installed to handle discharge of petrol and diesel cargoes separately; (iii) night navigation facilities may be provided at FOTCO/PQA; (iv) implementation of channel widening plan of PQA for LNG vessels may be expedited; PQA has been charging amount per vessel for this already; (v) off-shore sampling may be carried out in minimum possible time. This will reduce time at berth; (vi) construction of an additional petroleum jetty at Port Qasim may be expedited; (vii) necessary repairs/arrangements for integrity and maintenance at the three Oil Piers at KPT need to be ensured as early as possible and; (viii) facilitation may be provided to PSO for its project relating to pipeline connectivity between KPT and PQA for flexibility of operations and security of supply chain of petroleum products.

Copyright Business Recorder, 2021


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