Draft Environmental Impact Assessment Volume 1 Project Number: 48307-001 July 2014 PAK: Engro Fast Track LNG Regasification Project Prepared by Environmental Management Consultants (EMC) for Engro Elengy Terminal Private Limited The environmental impact assessment is a document of the borrower. The views expressed herein do not necessarily represent those of ADB's Board of Directors, Management, or staff, and may be preliminary in nature. Your attention is directed to the “Terms of Use” section of this website. In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area. Elengy Terminal Pakistan Limited Environmental & Social Impact Assessment Proposed LNG Import Terminal Project, Port Qasim-Karachi July 2014 ENVIRONMENTAL MANAGEMENT CONSULTANTS 503, Anum Estate, Opp. Duty Free Shop, Main Shahrae Faisal, Karachi. Phones: 9221-4311466, 4311467, Fax: 9221-4311467. E-mail: [email protected], [email protected] Website: www.emc.com.pk Elengy Terminal Proposed LNG Import Terminal Project, Port Qasim-Karachi Pakistan Limited ESIA Report Executive Summary INTRoDUCTIoN AND oBJECTIVES This Environmental & Social Impact Assessment (ESIA) evaluates the potential environmental, social, economic, cultural, and natural impacts of the proposed Liquefied Natural Gas (LNG) Import Floating Terminal Project. Environmental Management Consultants (EMC) Pakistan has been contracted as a third party consultant by Elengy Terminal Pakistan Limited (hereinafter referred as proponent) to conduct a detailed assessment (ESIA) of the proposed LNG project. Elengy Terminal Pakistan Limited (ETPL) was registered under the SECP Act 1997, in January 2012, and is a 100% owned subsidiary of Engro Corporation Pakistan to position Engro as a partner of choice with Key Stake holders. ETPL boasts of experience in terminal business due to its affiliation with Engro Vopak Terminal Limited, a joint venture of Engro Corporation (Pakistan) Limited (50%) and Royal Vopak of the Netherlands (50%). ETPL intends to develop a 3.5 mtpa floating LNG terminal in the jurisdiction of Port Qasim. The project includes constructing and operating a Liquefied Natural Gas (LNG) terminal in Port Qasim, inclusive of ship berthing and import facilities, floating storage tanks and regasification equipment. The project intends to provide facilities for receiving supplies of LNG via a conventional LNG carrier, for offloading, transfer and loading into a Floating Storage and Regasification Arrangement (FSRA) which can be an FSRU, or FSU+ On Shore Regasification, or FSU + on barge Regasification. The FSRA will store and re-gasify the LNG and deliver the re- gasified liquefied natural gas (RLNG) via jetty and onshore associated facilities to the gas network operated by the in-country transmission pipeline providers. Dredging will be required to create the berthing and the turning basin. Dredged material will be utilized for the reclamation and to construct shore protection structure. The balance will be dumped at sites advised by PQA. The construction of the LNG import terminal is expected to begin by 1Q 2014 and will be completed within 11 months. The estimated cost of the proposed project is USD 120 million. The GOP had mandated SSGC to develop a project for the import of LNG. The first supply of LNG of 3.5 million tons per annum (equivalent to 500 MMCFD of gas) was targeted for the year 2011; followed by another for supply of 2.0mtpa by the year 2013. The projects stand delayed, while the shortage keeps multiplying. This has gone to the extent that the most populated province 'Punjab' is facing five to six days of gas shutdown while the electricity supply from power houses in Sindh and Punjab are resulting in shutdown from six to eight hours per day. Environmental Management Consultants I of XVII E x e c u t i v e S um m a ry Elengy Terminal Proposed LNG Import Terminal Project, Port Qasim-Karachi Pakistan Limited ESIA Report Each industry running boilers to generate steam is being forced to use coal, furnace oil and diesel with increased utilization of firewood and charcoal in homes, thus inducing rapid deforestation and warming of their microenvironment. ETPL intends to follow a fast track approach towards developing the LNG import floating terminal in order to bridge the gap between supply and demand of energy. The Project is primarily based on developing the required infrastructure so that LNG can be brought into the Natural Gas (NG) market, which has witnessed phenomenal growth in the energy sector in Pakistan. In the first stage, the focus is on the fastest method to facilitate LNG flow into the NG pipeline network in Pakistan. LEGISLATIVE REQUIREMENT This ESIA has been prepared to fulfill the regulatory requirements of Pakistan Environmental Protection Act, 1997 and to satisfy the evaluation criteria of the International Finance Corporation (IFC). Applicable National & International Guidelines and regulations have been used as a reference in preparing this ESIA. The project falls in Schedule-II of Pakistan Environmental Protection Agency (Review of IEE/EIA) Regulations-2000 and Category-A of Equator Principles which means it could have significant environmental impacts if appropriate mitigating measures are not implemented. PEPA Review of IEE/EIA Regulations 2000 categorizes projects in two separate Schedules, which require either an IEE or an EIA. The LNG jetty comes under both Schedules which have port and harbor development projects listed. Schedule-I projects require an IEE and concerns ports and harbors having ship displacement of less than gross 500 tons. Schedule-II is applicable if the gross displacement exceeds 500 tons and requires an EIA. The proposed LNG terminal project falls under Schedule-II as it involves shipping activity having gross displacement above 500 tons and will thus require an EIA. THE PRoJECT The Project is intended to provide facilities for receiving supplies of liquefied natural gas (LNG) via conventional LNG carrier (LNGC), for offloading and dockside transfer to an FSRA. The re-gasified liquefied natural gas (RLNG) will be delivered via a jetty and onshore facilities to the gas networks operated by SSGC. The facility would be designed as per the codes and standards mentioned in LNG Policy 2011, Guidelines provided by PQA and International Codes and standards that are recommended by the engineering consultant in line with the best practices of the industry. Given the nature of the business and the valuable asset placed in the proposed terminal, audits by LNGC and FSRU operator ensures that the terminal is designed and operated to international standards. Non conformance would mean non utilization of the terminal by LNGC Environmental Management Consultants II of XVII E x e c u t i v e S um m a ry Elengy Terminal Proposed LNG Import Terminal Project, Port Qasim-Karachi Pakistan Limited ESIA Report bringing product or the FSRU operator to process the gas to the SSGC. From the ETPL, the re-gasified LNG will be transported via pipeline to SSGC Grid at KESC Bin Qasim Power Plant. The pipeline from ETPL boundary wall upto the Delivery point after KESC Bin Qasim shall be underground, buried with minimum depths of 1 m. From this point, a 42 inch SSGC Branch Pipeline shall be constructed and buried underground all the way upto SMS Pakland. This route has the following salient features to its advantages; n Total length ~23 km n Majority of ROW within PQA n No major population centers along the route n Does not cross main navigational channel or any major road/rail crossings n Existing SSGC pipelines follow similar route The pipeline will be designed, installed and operated as per ASME B31.8, the American National Standards for Gas transmission and distribution piping systems. The pipeline design will be vetted by SSGC being experts in the field and their comments will be incorporated in the design. The pipeline design will also be as per the geotechnical information of the area conducted by ETPL in consultation with PQA i.e. Allowable soil bearing capacities, modulus of sub-grade reaction, seismic coefficients, plasticity index and moisture and sulphate content of the soil. HAZOP will be conducted regarding the FEED of the pipeline, preferably with participation of SSGC as well. A Detailed Quantitative / Qualitative Risk Assessment (QRA) has been carried out by ETPL. Dredging will be required to create the berthing and the turning basin. Dredged material will be utilized for the reclamation and to construct shore protection structure and the dredged material would be dumped peer advice of PQA. ETPL has sufficient backup area at the proposed brown field site that will be prepared to accommodate berthing of an LNG FSRU (floating storage and regasification unit), which will also act as a carrier vessel and will bring in LNG supplies to the jetty. The dredge spoils from the berthing and turning basin, as discussed below, will be utilized for land fill, if required. The elevation grade will be raised for flood protection purposes. Approximate dredged quantity would be upto 1.6 Million cubic meters for brown field site (includes the dredged quantity for berthing basin, for berthing pocket and portion of the turning circle outside the channel). Environmental Management Consultants III of XVII E x e c u t i v e S um m a ry Elengy Terminal Proposed LNG Import Terminal Project, Port Qasim-Karachi Pakistan Limited ESIA Report In case alternate STS process is selected, the dredging volumes will decrease by approx. 40%. The existing turning circles at IOCB or QICT2 can be used and the dredging quantity can be brought down to upto 1.6 million cubic meters if the orientation of the jetty can be made parallel to the channel.