Monthly Progress Report: Establishment of Fast Track LNG Import Terminal

The project aimed to establish a terminal on a build-operate-transfer (BOT) basis at Port Qasim, Pakistan. The terminal's construction activities slowed down in May 2015, with only minor work remaining in areas not linked to on-site civil works monitoring. Preparation of various versions of tariff financial models was a major activity during the month. The Pakistan Quantity Authority (PQA) officials, including the Director General (Operations) and Director General (Finance), required multiple versions of the models. The PQA desired to carry out these exercises from time to time and held lengthy discussions with the tariff expert on the subject. The activity was delayed due to diverse opinions within the PQA regarding how much to charge to recover towage charges. The finalization of LNG Regulations was another significant activity in May 2015. The first draft of the document was prepared in February, but the final version was pending. The final draft document was submitted as a deliverable after getting it reviewed by Mr. Mohsin Siddiqui. Meetings were held with Mr. MAG Siddiqui at ECIL to discuss the matter and present a meaningful document. The document was deemed good enough and referable in future for LNG Terminal(s). Relevant paragraphs or portions of the material were incorporated into SOPs, Conditions of utilization, and other documents by Mr. Mohsin Siddiqui in consultation with the Director General (Operations), PQA. The review of design documents and studies furnished to the Consultants by EVTL was continued at Sellhorn offices in Germany. The activity aimed to ascertain the soundness of the civil structure. The Inception Report was reviewed by Sellhorn in the light of comments from PQA and ECIL. Due to many holidays in Germany during the month, the activity did not progress with much impetus. The main work is planned to be done in the ensuing months of June and July 2015. The desk-type study of PQA navigation channel was resumed after receiving the 3D survey of bathymetry of the navigation channel from PQA. The study included part work or initial preparatory design of the channel. Review of emails and other material pertaining to the activities and correspondence of LNG Consultants with QatarGas, PQA, and other stakeholders was continued throughout the month. Efforts were made to inspect the civil works to find any hidden defects that may have surfaced. Experts, Environmental Consultants, had requested a meeting with their counterparts at EETPL. However, the visit was deferred until the necessary arrival of relevant counterparts in ENGRO after availing their annual leave and availability of time to them. It was more difficult to have access to the terminal without proper permission of EETPL due to strict security measures after the arrival of FSRU. Both consultants of Granada Group provided necessary support and consulting services to AEAI clients, including PSO, SSGC, and PQA, during this month. Priority was given to addressing and closing items necessary to finalize the negotiation and execution of the LNG Supply Contract with Qatargas. Priority was also given to providing support to PSO, Legal, and Procurement Consultants in the preparation of Tenders for Spot Purchases of LNG from the open market. The issues addressed included progress on closing the remaining 18 items in the Qatargas Action Register. The items were given below with the end of the month status for each item and the steps taken to close out most of the items. Issues related to guarantees required by Qatargas regarding the depths of various sections of the Port Qasim navigation channel and waterways were highlighted to Qatargas. The requested details were obtained from PQA and provided to Qatargas along with the latest bathymetry report indicating sufficient depths of water in all parts of the channel for navigating the QFLEX vessels. The matter of waivers from the compliance with Pakistan LNG Policy required by Port Qasim Authority prior to allowing the entry of QFLEX LNG carriers in the navigation channel was still under consideration by the Government of Pakistan. Once the decision is taken by the ECC, it would be conveyed to Qatargas by PQA through PSO. The findings of the last security assessment audit of the PQA waterways and infrastructure as well as the EETPL Terminal and planning the next visit of the Qatargas Security Assessment Team for finally clearing the security plan and arrangements were addressed. Drills were arranged with the participation of all concerned parties to practice the procedures agreed in the Joint Security Plan. The drills were observed and debriefings carried out at the end of each drill to make all parties aware of the shortcomings and mitigations suggested to improve the performance. The PQA tariff for Qatargas-owned LNG carriers calling at Port Qasim was discussed along with the Financial Model showing the details of the calculations. A counter offer for the Port Tariff for the QFlex vessels was received from Qatargas, which was discussed with PQA Management and found to be inadequate