Construction of LNG terminal at PQ: Pak-Dutch joint venture violating safety standards
KARACHI (February 24 2008): A Pakistani and Dutch joint venture (JV) is reportedly planning to construct a liquefied natural gas (LNG) terminal in violation of national and international safety standards at Port Qasim.
The Engro Vopak Terminal Limited (EVTL) and the Royal Vopak (RV) of Netherlands are negotiating with a four-member delegation of Port Qasim Authority (PQA) in Dubai on a suitable location for development of the Mashal LNG Terminal (MLT) at Port Qasim.
"EVTL wants the terminal to be set up next to the existing Liquid Chemical Terminal (LCT) while the PQA wants it on the allotted land of Chara Creek or muchakland due to safety concerns," well-placed sources told Business Recorder on Saturday.
If the proposed terminal is built next to LCT, which would cost the builder an estimated $100 million to $1000 million, would not only put the surrounding area into risk, but also violate a three-point criterion set by the ministry of petroleum and natural resources in Liquefied Natural Gas (LNG) Policy, 2006 on safety standards.
According to the criteria based on technical, financial and safety standards 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."
They said that in case of any accident like fire eruption, etc the consequences would be far more disastrous than caused by a normal blaze. "Placing LNG and chemical together will be nothing but inviting a health and safety risk," they added. "Constructing a gas terminal in proximity of a chemical terminal will be potentially dangerous and risk safety standards of the port... it should be built on an isolated place," they argued.
Sources also said the development was also likely to cause operational problems at the Port Qasim. "Providing a one-way transit to a LNG vessel destined for the proposed terminal would affect general traffic at the port," they added.
They claimed that the EVTL by sticking to its point on location of MLT, wanted to grab an attractive source of income in future by getting charge of the LNG cargo handling. They said construction of the MLT would be undertaken progressively in two stages and during the first stage the terminal would be used as a floating set-up.
The planned design capacity of initial floating terminal would be of two million tonnes of LNG per annum with a capability to handle vessels of up to 75,000 tonnes.
In the second stage, they said a shore-based installation would be made and capacity of the terminal would be increased as per demand to cater for tank capacities, etc on the allotted land. Sources said that full terminal capacity of the MLT was targeted at seven million tonnes of LNG per annum. According to LNG Policy, 2006, the MLT was to be built by the LNG developer, Shell Gas & Power, but the project would now be undertaken by the EVTL and RV after the former showed lack of interest in the project.
Business Recorder [Pakistan's First Financial Daily]