PESHAWAR, March 19: Oil and Gas Regulatory Authority (Ogra) has reserved its decision in an application of the Sui Northern Gas Pipeline limited (SNGPL) for the grant of integrated licence (exclusive) for transmission, distribution and sale of natural gas in various parts of the country.

“Decision in the SNGPL’s application for the grant of integrated licence would shortly be announced,” pronounced the Ogra chairman Munir Ahmed here on Tuesday after closing the evidence in an application of the SNGPL.

Rule(4) of the Natural Gas Regulatory Authority (licensing) Rules, 2002, requires the SNGPL to get re-validated its licence already issued to it in 1968 for the transmission, distribution and sale of natural gas from the newly set up entity — Ogra.

In line with the licensing rules of 2002 the SNGPL has sought re-validation of its licence for transmission, distribution and sale of natural gas in Punjab, the NWFP, Federally-Administered Tribal Areas (Fata), Federal capital, Azad Jammu and Kashmir and some parts of Sindh — the areas where it is presently carrying out its activities.

The Ogra chairman reserved the authority’s decision in the SNGPL’s application after listening to the submissions made for and against the grant of licence to SNGPL by the interested parties concerned.

Ogra’s vice-chairman Jawaid Inam, its member finance Mehmood Elahi and member oil Rashid Farooq were other members of the court.

The chairman closed the evidence after hearing the SNGPL’s stand and objections raised there upon by two of the three interveners who, in their submissions to the authority, opposed the grant of exclusive integrated licence to the SNGPL on various counts.

The Sui Southern Gas Company (SSGC), the main intervener, opposed the grant of exclusive integrated licence to SNGPL on the ground that it would be harmful to business interest in “the area of its franchise” — Sindh and Balochistan.

The SSGC’s legal expert submitted that the award of exclusive licence to SNGPL would be against the national and public interest as the two entities — SSGC and SNGPL — have their separate areas of franchise where they have their own exclusive transmission and distribution systems.

He submitted that the SNGPL should be made to sell its assets and distribution system put up in place in Sindh to his client (SSGC) for Balochistan and Sindh were the franchise areas of SSGC.

He further submitted that it was not advisable that the two entities should have distribution systems in a single area.

As there was no provision in the relevant law about the inter-provincial subsidy mechanism, hence, the grant of licence for distribution of gas to the SNGPL in Sindh and Balochistan would cause problems of multiple nature. “In this way, one consumer would be paying SNGPL’s tariff and the other paying SSGC’s tariff in a single province,” submitted SSGC’s legal expert.

He said that his client had no objections to the grant of licence to SNGPL if it was given only for the areas in which it (SNGPL) was already carrying out its operational activities — other than Sindh and Balochistan.

However, the SSGC did not press its stand after the SNGPL’s managing-director Abdul Rasheed Loan submitted that his firm had no intentions to have its distribution system in areas where SSGC was carrying out activities relating to transmission, distribution and sale of natural gas.

Nonetheless, he did not agree with the SSGC’s stand that there were any “areas of franchise” restricting the scope of regulated activities of the SNGPL.

He said that the licence granted to SNGPL did not impose any restrictions on his organization as the agreement did not involve the term “area of franchise”.

According to him, the agreement authorized the SNGPL to carry out activities in the divisions which were by name mentioned in it (agreement) and the rest of the country, hence, there did not arise the question of demarcation of areas for the SNGPL and SSGC’s operations.

He submitted that the SNGPL had not applied for licence for distribution of natural gas in Sindh’s parts where SSGC was having its distribution system. Rather, he added, the SNGPL had asked for licence only for construction, operation and transmission of gas in Sindh and Balochistan.

In reply to the SSGC’s submission, the SNGPL’s MD said that if the company was interested in buying his organization’s assets and  distribution system in Sindh the same could be  looked  into and discussed.

“We have been talking to them for years but they are not interested (to strike a deal on this subject),” said the SNGPL’s MD.

Making a point for the award of licence to SNGPL for transmission of natural gas from Sindh to augment its distribution system in Northern region, Mr Loan said that if gas in Sindh was allocated to SNGPL (by the federal government) then it was its right that the company should be allowed to lay transmission lines to transport gas to its distribution system.

“Similarly, SSGC would be having the right to be given permission when ever they are allocated gas in Punjab and they have to lay transmission lines to take it to their own distribution system in Sindh,” submitted the SNGPL’s MD.

The second intervener of the application Northern Power Generation Company Limited (NPGCL) in its case against the applicant submitted before the Ogra that it had not been provided with the relevant information for its analysis despite the fact that the authority had issued clear cut directives.

However, he could not make an impressive presentation before the authority. In reply to NPGCL’s submissions before the Ogra, the SNGPL’s general manager accounts, Ghulam Qadir, rejected the impression created by the intervener.

He said that not only the intervener was provided with the information in accordance with the Ogra’s directives, rather, the SNGPL’s annual report contained an elaborate revenue position and details pertaining to financial matters of his organization.

After hearing arguments for and against the grant of licence to SNGPL from the interested parties concerned, the court officer, Sarfaraz Ahmed Sheikh, asked the SNGPL’s representatives several questions regarding company’s performance, future plans and consumer services.