By Shahbaz Islam, Head of Corporate Communications, SSGC
Pakistan depends heavily on the consumption of natural gas whose contribution to the country’s total energy supply mix is around 51%. The country’s gas reserves have, however, been on a decline since the year 2000. In 2004, for the first time, a strategy to provide Pakistan with an alternative energy resource was devised. A number of attempts was made to bring in fast track Liquefied Natural Gas (LNG) into the country, yet for one reason or the other, none could materialize.
In 2004, for the first time, a strategy to provide Pakistan with an alternative energy resource, was formulated by the country’s policy makers and energy mandarins. An integrated approach in the form of Pakistan ‘Mashal’ LNG Project was first planned out, one in which the LNG importer was also supposed to be the supplier. International private parties were invited to submit their bids for setting up a dedicated Terminal. Response was positive and it seemed for a while that a major headway will be made. However, before LNG could sail into the country, the Project was struck down by the judiciary after its transparency was questioned.
By mid-2010s, the natural gas situation was getting worse. The country’s constrained demand for natural gas had reached 6 billion cubic feet per day while the local gas production hovered around 4 billion cubic feet per day. When the current government took charge in 2013, the country’s energy supply issues were worse than ever. Long queues on CNG stations, gas-fired industries going out of business, power outages and the resulting growing public angst were the headline news. Something had to be done and done fast.
So where did this government succeed where the past three governments failed? To bring in LNG into the country, the government opted for an unbundled approach whereby the LNG re-gasification terminal was separated from LNG procurement. A multi-pronged strategy was followed by the Government, that included a fast track import of LNG, installation of LNG terminals and laying down of a dedicated gas transmission pipeline. It was clear that this time, Pakistan’s policy makers meant business. The LNG Import responsibility was given to Pakistan State Oil (PSO) whereas SSGC was entrusted the task of transmission and supply to Sui Northern Gas Pipeline Ltd. (SNGPL), being the end-user.
LNG as compared to liquid fuels provides greater efficiency, lower maintenance costs, ease of transportation, and no pilferage or adulteration issues. LNG import to Pakistan is crucial for reducing the production costs of thermal power by replacing furnace oil and improving the efficiency of the thermal generation plants. LNG is clearly the most viable and the fastest stop-gap solution to Pakistan’s energy needs.
In April 2014, a major step forward towards the import of LNG into Pakistan was taken when SSGC and Elengy Terminal Pakistan Limited (ETPL) inked an LNG Services Agreement that paved way for the construction of an LNG import terminal at Karachi’s Port Qasim in a record period of 335 days. This first of its kind terminal has the capacity for re-gasification of up to 600 mmcfd of RLNG. On August 27, 2017, Prime Minister Shahid Khaqan Abbasi inaugurated the terminal.
In the same year, the Company’s team of engineers, technicians and workers, with an unprecedented local and foreign collaboration, started working on the RLNG Project – the biggest infrastructure development project ever undertaken in SSGC’s history. Undoubtedly the magnitude and scope of this mega project was overwhelming. In order to handle a project that entailed an incredible use of men and machine, the best way forward was to divide the project into two parts – RLNG-1 and RLNG-2 projects.
In June 2014, Team SSGC embarked on the first phase or the RLNG-1 project, undertaken to provide an infrastructure for supplying 400 mmcfd imported RLNG. By February 2015, the Company had successfully commissioned a 42” dia. 17-km pipeline from the Custody Transfer Station (CTS) in Port Qasim to SMS Pakland in Karachi, a 42’ dia. 4-km line from RS Nara to Sawan and a 24” dia. x 33 km Tando Massu line.
In order to boost gas pressure while it flows through the lines, SSGC project teams relocated from the Company’s Dadu facility, two idle compressors dating back to 30 years ago, and brought them all the way to SSGC’s HQ-2 Daur after getting their engines overhauled in Sweden. These turbo compressors, each of 200 mmcfd volume were then installed to help achieve the desired delivery pressure of 1,115 pound per square inch gage (psig) at Sawan. The loop-lines, along with the relocation of the compressors, enhanced the Company’s transmission network capacity to swap 400 mmcfd of indigenous gas in lieu of RLNG to SNGPL. The import of RLNG into the country through these lines meant the opening of a virtual gas field.
And on May 26, 2015, Exquisite, a Belgian flagged ship carrying nearly 60,000 tonnes of fast track LNG, sailed into the shores of Port Qasim in Karachi. On this day, Pakistan became a member of the exclusive LNG Club, joining the ranks of the 33 LNG importing nations of the world, Since then the terminal has become a major hub of activity, engaged in receiving LNG and re-gasifying it in a Floating, Storage, Re-gasification unit or FSRU.
In 2015, the LNG Trail that began from the CTS in Port Qasim continued with the second phase of the project or RLNG-II, for the eventual supply of 1.2 bcfd RLNG by laying down a dedicated 337-km line from Karachi to Nara. RLNG-1 was a challenging project but with RLNG-2, Team SSGC was faced with a much bigger challenge.
Planning had to be the key to the eventual success. Each department in SSGC had to come out of its shoes to take on an unprecedented project. Tasks needed to be clearly identified, simulation studies, and route surveys had to be conducted on a grand scale and environmental impact assessment had to be done. Local and international tenders needed to be floated on a massive scale, while ensuring transparency at every step of the way. And finally the execution had to be top notch and in compliance with international quality standards.
The RLNG project was all the more challenging because the teams responsible for building an intricate network of transmission lines had to travel through rough terrains, swamps, semi-arid zones, agricultural lands and rivers crossings. And as they went along, they had to brave harsh weather conditions too. The Welding and Coating exercises requiring local and foreign vendors was another challenging job, especially when it came to welding in temperatures that reached 50 degree centigrade.
Each segment presented different topographical and climatic sets of challenging situations. Considering the diverse condition each segment had to offer, the project was divided into four segments or sub-projects on the basis of convenient landmarks, terrains, logistics and way points available along the route. One of the most tedious tasks carried out during RLNG-2 was in the use of the state-of-the-art Horizontal Directional Drilling (HDD) technology. For the first time in the Company’s history, the engineers and rigers from SSGC and partner concern China Petroleum Bureau, bored through a 2.5-km river bed at the site of the River Indus Crossing to lay down the pipeline.
The sleepy countryside of Daur, some 45 kms away from Nawashah is home to HQ-2 Daur, one of the nerve centres of the Company’s transmission network. Daur became the project’s center point. More than 800 engineers and workers from SSGC, SAF International and Solar made HQ-2 Daur their base camp for the entire duration of the project. The tasks assigned to them perhaps were the project’s most intricate, and backbreaking jobs, requiring exceptional prowess especially when it came to handling state of the hard machineries and equipment.
The job of these valiant men were the civil and installation works of 6 compressors shipped from the USA through Solar in order meet the SNGPL’s demand of 1,115 psig pressure at Sawan and to resolve the issue of pressure drop during flow of gas from Karachi to Nawabshah. Subsequently, 6 compressors of 120 MMcfd each, with a total compression power of 30,000 HP were transported and installed on site. The installation and commissioning of the compressors took several months. All the teams worked 24/7 on shift roaster to ensure timely installation and commissioning of the compressors.
The incredible team work each and every member engaged in this massive project has doubled SSGC’s capacity and its asset base, while providing a much needed solution to Pakistan’s energy wows. This unprecedented engineering feat spanning 352-kms will not only augment gas supplies for a large number of customers but will ensure that the viability of Pakistan’s energy future is directly linked to LNG.
On January 27, 2017, a new era of sustainability was unveiled when, with the commissioning of the RLNG-2 line, SSGC started commencing the transfer of 600 mmcfd gas from the FSRU in Port Qasim, Karachi to the consumption nodes in Punjab. As a result, the RLNG consignments dramatically improved gas supplies to Punjab’s power, fertilizer and CNG sectors and helped bridge the demand-supply gap substantially. Struggling industries are seeing a major revival and a dawn of macro-economic stability is emerging in the country.
Meanwhile, the LNG Terminal is seeing ships anchoring on a frequent basis. More than 100 cargoes of LNG procured by PSO at the Terminal have so far been re-gasified and with the increase in re-gasification capacity, frequency of cargoes bringing in LNG is bound to increase. At the same, an equivalent energy content of indigenous gas of the same volume has been swapped with SNGPL from various gas fields.
This massive project has in fact opened LNG floodlights. It marks the continuation of Pakistan’s Government’s plan to encourage local and foreign investors to not just import LNG but to build a network of related infrastructure in strategic locations. By November 2018, the 2nd LNG Terminal being established by Pakistan Gas Port, will start receiving the second FSRU that will provide another 600 mmcfd of re-gasification facility to state-owned Pakistan LNG Terminal Limited. Pakistan’s LNG re-gasification capacity will go beyond 1.2 bcfd.
In the meantime, SSGC and SNGPL have started planning out a new pipeline from Karachi to Lahore which will add another 1.2 bcfd of LNG to meet the growing demand of domestic, commercial, industrial, power and CNG sectors.
The steely resolve of the present Government, the Ministry of Petroleum and Natural Resources and other stakeholders including Elengy Terminal (Pvt.) Ltd, PSO, SNGPL and SSGC is quite apparent by the way they have silenced all the detractors who had given up hope on the success of the LNG projects.
By the look of things, better days are not just coming; they are here.