ISLAMABAD: The oil companies have asked the government to address on an urgent basis logistic constraints resulting in underutilisation of infrastructure at the ports and causing long wait for ships and economic losses to the oil companies and the country.

In separate letters to the ministers of petroleum, energy and maritime affairs, the Oil Marketing Association of Pakistan (OMAP) said the government appeared to be targeting short-term quick fixes and day-to-day planning and that, too, haphazardly. “For a country beset with financial woes we can ill-afford the financial fallout due to lack of coordination between key stakeholders resulting in ill-conceived planning and the resultant negative fallout,” wrote OMAP Chief Executive Officer Dr Ilyas Fazil.

The OMAP, representing about two dozen oil marketing companies (OMCs), has also asked the government to put in place an inter-ministerial forum of key energy sector stakeholders – Petroleum Division, Power Division and Maritime Affairs and their relevant entities – to forecast the need for petroleum products, gas and electricity and plan operational arrangements to avoid repeated episodes of shortages and over-production.

The OMAP also proposed creation of a panel of experts to support, critique and monitor implementation of such coordinated efforts.

Oil companies send letters to petroleum, energy, maritime affairs ministers

“A well-coordinated tight-knit systems approach is needed to keep all areas of the country well-supplied with petroleum (oil as well as gas) and electricity,”, wrote the OMAP CEO. He suggested an inter-ministerial meeting of petroleum, energy and maritime ministries, attended by key officials involved in the planning of oil and gas availability and imports, to share the volume needed of each component of energy that they control and then firm them up at the product review meeting to commit respective volumes of each product.

Pakistan imports 70 per cent of motor spirit (petrol) and 50pc of high speed diesel (HSD) needs. Except for Attock Refinery located at Rawalpindi, all the four other refineries (NRL, PRL, and Byco at Karachi and PARCO Mid-country at Multan) are about 90pc dependent on imported crude. Collectively referred to as petroleum oil liquids, these are all received by sea through the ports.

At Keamari, the Karachi Port Trust (KPT) handles all petrol and crude imports and has three berthing oil piers (OPs) for handling both POL and non-POL cargoes. As per the KPT’s oil tankers berthing policy, OP-I is allocated to POL vessels and sometimes for chemicals, OP-II to all tankers on first come first serve basis and OP-III has a rotation of two POL tankers followed by one non-POL tanker.

In all, the POL import capacity at the KPT can, therefore, be roughly considered as 16 million tonnes per annum, based on an average ship size of 50,000 tonnes. The actual KPT utilisation for POL was only about 12 million tonnes during 2019-20 primarily due to the availability of only two OPs, with the third closed down for repairs. Other contributing factors to this shortfall are the loading of POL and non-POL products for exports in small consignments, and long loading times because of low capacity pumps and small diameter pipelines.

Port Qasim handles all HSD and furnace oil imports through a jetty capable of berthing ships up to 75,000 deadweight tonnage, a 4km pipeline trestle and three marine loading arms of 16” diameter. The trestle, which is designed to accommodate six product pipelines, allows vehicular access to the terminal through a 3.5-meter-wide road. Presently two product pipelines of diameter 30” and 36”, handling black oil (heavy fuel oil) and HSD have been laid.

The facility has a minimum designed berthing capacity of nine million tonnes oil per annum with 50pc berth occupancy. Due to zero furnace oil imports during 2019-20, the capacity utilisation at Port Qasim was very low -- around 4.9 million tonnes.

The single point mooring of Byco primarily caters for import of crude oil for Byco’s refinery. In 2019-20, its utilisation was only about two million tonnes equivalent to the year’s crude throughput at the refinery. It can, however, be also used for importing refined petroleum product. There have been various proposals in this regard but so far they have not met with fruition.

In 2017, the downstream industry through an international consultant prepared a report on port constraints, identified reasons for underutilisation of ports and gave a roadmap to avoid constraints in an ever-growing petroleum demand scenario. Based on its recommendations, robust berthing standard operating procedures (SOPs) were put in place by the industry stakeholders.

Four years later, the industry continues to face the problems which means the SOPs are being violated.

Published in Dawn, August 30th, 2021