M/s Energas, Tabeer Energy: Gas cos convey availability of LNG pipeline capacity for transmission, distribution

Sui gas companies have conveyed availability of LNG pipeline capacity to be allocated for transmission and distribution to M/s Energas and M/s Tabeer Energy, sources close to Secretary Petroleum told Business Recorder.

On June 7, 2021 OGRA was apprised of pipeline capacity availability for 44 MMCFD in SSGC’s transmission and distribution network available for allocation to Energas while on June 11, 2021, SSGC apprised OGRA of pipeline capacity availability for 150 MMCFD in SSGC’s transmission network available for allocation to Tabeer Energy.

The sources said, Sui Northern Gas Pipelines Limited (SNGPL) during the meeting held at Ministry of Maritime Affairs (MOMA) on June 17, 2021 chaired by Minister for Maritime Affairs, explained that it is willing to allocate minimum of 75-100 mmcfd pipeline capacity to each of the terminal developers in line with Gas Third Party Access Rules, 2018 and Pakistan Gas Network Code.

During the meeting, both the terminal developers were directed to hold meeting with SNGPL to negotiate the details for pipeline capacity allocation and send the same to OGRA for concurrence by June 30, 2021. SNGPL shall place the matter before its board of directors for approval of any such arrangements prior to sending it to OGRA.

Sharing the details, sources said, Cabinet Committee on Energy (CCoE) in its meeting held on February 08, 2021 while considering a summary submitted by the Petroleum Division approved the following recommendations made by the Committee constituted by CCoE on January 18, 2021: (i) within 10 days of the date hereof, each one of the new LNG Terminals shall convey its proposed completion date; (ii) OGRA shall allocate spare pipeline capacity until such proposed completion date, of the first of the two LNG terminals, for short term only, on three months rolling basis to any applicant including CNG sector meeting the necessary criteria. Petroleum Division shall convey the Cabinet direction to OGRA for implementation; (iii) the two new LNG terminals shall indicate their required capacity in the existing pipeline system (including 17km new pipeline from PQA to Pakland) and commit to take it on firm’ basis from their indicated completion dates respectively. If required capacity is more than the available capacity then each shall be allocated capacity proportionally, still on a firm’ basis; (iv) If the new LNG Terminals are delayed on account of any reason, they shall convey the same in writing at least three months prior to the originally indicated completion date(s) and advise of the new completion date(s). In such a case, OGRA shall allocate the available capacity until the new revised date(s) of completion submitted and; (v) when the North-South pipeline is completed, and further expansion as the PQA-Pakland route is made, there shall be sufficient pipeline capacity to cater to all, and at such time OGRA can do allocation on a longer-term basis, as needed, as per Rules.

According to Petroleum Division, update of the two issues i.e., allocation of land for Tie-in Points to new LNG terminals and allocation of pipeline capacity by the Sui companies is as follows:

Allocation of land for Tie-in Points: This involves around 11 acre of land and the ownership of the land is with Pakistan Steel Mills Ltd (PSML). Regarding the finalisation of lease agreement between the PSML and SSGCL, it has been approved from PSML board, the land will be provided to SSGCL who will then sub-lease it to new terminal developers. Reportedly PSM is claiming Rs35 million/acre for 30-years lease to the said land. SSGCL is of the view that PSM’ rate is on higher side as compared to Government of Sindh’s rate of 1.5 million/acre for 99-years lease. Therefore, in order to conclude the matter, it has been mutually decided by PSML and SSGCL to let the matter be decided by the concerned Ministries.

Meanwhile, SSGCL has also informed that during the Inter-Ministerial meeting held in the Maritime Affairs Division on June 17, 2021, it was decided that existing piece of land available with SSGCL be utilised for construction of tie-in points for both the terminal developers. Further, SSGCL will provide the land to both the terminal developers on same terms and conditions on which previous existing LNG terminals were granted.

According to SAPM on Petroleum and Power, Tabish Gauhar, the government has granted construction licences to two new LNG terminals (with no GoP guarantee “take or pay” guarantees) alongside facilitating construction of on-ground LNG storage and enhanced pipeline infrastructure by end 2023 subject to resolving various legal issues.

There is also plan to utilise all available ‘excess’ re-gasification capacity at the existing LNG terminals to reduce gas load shedding in the coming winter.

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