MUSHTAQ GHUMMAN

ISLAMABAD: Prime Minister Shahid Khaqan Abbasi has directed that the furnace oil–fired power plants maintain 75-day cover stocks of fuel for uninterrupted operation in case of non-availability of Re-gasified Liquefied Natural Gas (RLNG), well-informed sources told Business Recorder.

On January 6, 2018, Oil Companies Advisory Council (OCAC) allocated the requisite discharge port laycans of January 02, February 04-06, February 2018 for PSO High Sulphur Furnace Oil (HSFO) cargoes which were awarded in October 2017 for deliveries in December 2017 based on firm demand by the power sector and later deferred till January/February 2018 due to power plants low consumption.

According to Pakistan State Oil (PSO) the first cargo MT LION M against January 31, February 02 delivery laycan arrived at Port Qasim on January 28, 2017 with 58,000 MT and the PSO sent a request to OCAC for its berthing. Other charges are also expected to arrive within their specified laycans.

As of January 29, 2018, PSO has approximately 132,000 MT of ullage for HSFO at its ZOT complex and 34,000 MT of ullage at Lalpir- total 166,000 MT while the PSO is continuously taking furnace oil receipts from local refineries without fail. Moreover, average consumption of PSO supplied HSFO power plants in January 2018 is more than 9,000 MT per day and PSO’s credit customers, ie, Muzaffargarh, Jamshoro and Hub Power Company (Hubco) have a combined HSFO ullage of approximately 173,000 MT.

The sources said, it was decided in the meeting held on December 28, 2017 under the chairmanship of Prime Minister that all furnace oil power plants will reserve/maintain 75-day cover stocks of furnace oil in case of non-availability of RLNG. Statistics show that given the ullage and consumption position, HSFO based power plants have very limited stocks ranging from 2 to 16 days cover based on full load consumption.

PSO’s letter of January, 29, 2018 , reveals that furnace oil stocks of TPS Muzaffarabad is for 16 days, TPS Jamshoro 5 days, Hubco 12 days, Pak Gen. Power, 2 days, Lalpir Power 2 days, Kohinoor Energy 6 days, K-Electric 4 days, Tapal Energy 3 days, Gul Ahmad Energy 6 days.

PSO maintains that keeping in view the consumption pattern and ullage available with PSO and power plants, three HSFO cargoes with total cumulative quantity of 180 MT can easily be berthed without affecting local refineries receipts.

Meanwhile, Sui Northern Gas Pipeline Company Limited (SNGPL) has informed the Power Division that RLNG requirement for February and March has been calculated at 300 MMCFD and 400 MMCFD for February and March 2018 respectively which has been confirmed by Pakistan LNG Limited (PLL).

On January 29, 2018, PPL revealed that it is arranging 600 MMCFD RLNG supplies from April 2018 to optimally utilize the contracted capacity of its re-gasification terminal. However, SNGPL has always maintained the position that it can only avail RNLG to the extent of dispatch requirements given by the power sector and no further due to the back to back nature of the transactions.

The source said, PPL had already indicated that in case firm RNLG requirement for the 2018 is not provided, it shall not be possible for them to plan and arrange LNG cargoes, being on firm take or pay basis. However, they can manage to arrange requisite RLNG volumes at least 120 days in advance, subject to intimation of firm RLNG requirement which would be on 100 per cent take or pay basis.

SNGPL argues that firm dispatch schedule for RNLG based power plants from April 01, 2018 onwards be provided to the company enabling it to confirm RLNG requirement to PLL for arranging LNG cargos accordingly.