LNG Terminal: PQA fails to convince Dutch JV

Karachi: Despite holding several rounds of negotiations the Port Qasim Authority (PQA) has not been able to convince a Pak-Dutch joint venture (JV) setup about the 'disastrous' consequences of constructing a liquefied natural gas (LNG) terminal in the proximity of a chemicals terminal at Port Qasim.

The Engro Vopak Terminal Ltd (EVTL) and Royal Vopak (RV), of Netherlands, have a plan to develop the 'EVTL LNG Terminal' (EVTL-LNGT) next to the existing EVTL liquid chemical terminal (EVTL-LCT) at Port Qasim, for which sources expressed fear that it is likely to threaten national and international safety standards.

The estimated cost of the project, which would be completed in two stages, would range between $100 million and $1 billion. 'Last month, the PQA and the Pak-Dutch joint venture held talks in Dubai but no agreement could be reached on the location of the terminal,' sources told Business Recorder on Friday.

A four-member PQA delegation had visited Dubai, headquarters of the Dutch firm, to convince the JV, but it failed and returned with a plan of a Dutch experts' visit. 'They (JV) are not satisfied with PQA contention and a delegation of experts from Netherlands would visit Pakistan on March 19 for further discussions,' sources said. They said that EVTL wants the terminal, to be built as per PQA's Master Plan, to be set up next to EVTL-LCT, while the Authority proposes its construction on the allotted land of 'Chara-Creek', or 'Muchakland' due to safety concerns.

If built next to the EVTL-LCT, the EVTL-LNGT would not only put safety of the surrounding area to risk but would also violate the criteria set by the Ministry of Petroleum and Natural Resources in 'LNG Policy 2006' on safety standards.

According to LNG policy, the project developer would have to ensure that 'the project complies with the World Bank's Health, Safety and Environmental (HSE) guidelines, Pakistan's Environmental Protection Act 1997, National Environmental Quality Standards, Pakistan's health, environment and safety standards'.

Sources expressed fear that in case of any accident, like fire eruption, etc, the consequences would be far more disastrous than normal. 'LNG is a combustible commodity, and placing it near a chemical facility may be dangerous,' they said.

Apart from the safety issue, sources said, the development was also likely to cause operational problems at Port Qasim. 'Providing a one-way transit to an LNG vessel destined for the proposed terminal would affect general traffic at the port,' they added. Construction of EVTL-LNGT would be undertaken progressively in two stages and during the first stage the terminal would be used as a floating set-up with a design capacity of two million tons of LNG per annum.

In the second stage, a shore-based installation would be made and the capacity of the terminal, with the full capacity target of 7 million tons, would be increased as per demand to cater for tank capacities etc on the allotted land.