“This is for the first time that a quasi-judicial forum (Ogra) has issued a licence in national interest, instead of following laws, rules and regulations. This is like the law of necessity that has been haunting the nation for decades,” an official said. – File Photo

ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) has issued a ‘conditional construction licence’ to a private foreign firm in “larger national interest” to set up a terminal, jetty and allied facilities at Port Qasim for import of liquefied natural gas (LNG), a move termed by some officials as a serious violation of rules and regulations.

Sources in Ogra told Dawn that the ‘conditional licence’ had been issued within three weeks of the submission of application without conducting a mandatory public hearing. In the absence of a full-time chairman, they said, Ogra members were under extreme pressure from a federal minister to issue the licence immediately or get ready to go home.

“This is for the first time that a quasi-judicial forum (Ogra) has issued a licence in national interest, instead of following laws, rules and regulations. This is like the law of necessity that has been haunting the nation for decades,” an official said.

The Turkish firm, Global Energy Infrastructure Ltd (Ltd), having a registered office in British Virgin Islands and mailing address of Switzerland, had applied for a licence on May 23 this year, and Ogra informed it on June 15 about a “conditional licence” for construction of LNG receiving terminal at Port Qasim, official correspondence suggests.

Ogra officials said the conditional licence was issued because the country was in grip of a serious energy crisis affecting all sectors of economy and society and the gap between demand and supply of natural gas was widening by the day. “The authority (Ogra) in the larger national interest granted this conditional licence to GEI Pakistan (Pvt) Limited,” Ogra said.

It justified the decision on the grounds of national energy starvation and immediate requirement of natural gas and in view of various requests for executing the implementation agreement with the Port Qasim Authority for construction of the terminal, and securing LNG supplies from abroad.

Officials in the petroleum ministry said the licence should have been issued on completion of ESIA (environmental safety impact assessment) report and approval by the Sindh Environment Protection Agency (Sepa).

They privately confirm that Ogra did not meet these two essential prerequisites and issued the licence under political pressure.

The firm is yet to submit an acceptable ESIA report. In a public hearing a few days ago, Sepa had rejected an ESIA report submitted by GEI.

Secondly, holding a public hearing before granting a licence is mandatory. Instead, Ogra has stated in the licence that public hearing will be held in 90 days.

Interestingly, the officials said the GEI did not have a confirmed location for the terminal site and it also did not enter into implementation agreement with the PQA.

Asked about a conditional licence given to only one company, when more than a dozen firms had submitted expressions of interest (EoIs) to the Sui Southern Gas Company to be part of the LNG import project, an Ogra official said as a matter of principle the interested parties should have a letter of intent as a developer, a valid agreement with port authorities and a certificate from the provincial authorities under the Pakistan Environmental Protection Act to seek licence for the construction of terminal, jetty and other allied facilities, but no other company had applied for a licence because they had not yet completed these formalities.

Responding to another question, the official said Ogra had issued the ‘conditional licence’ that did not in any case involve any legal rights to the firm. For confirmation of the licence, the firm will have to ensure that terminal complies with the requirements of PQA, Pepa, World Bank HSE guidelines and all relevant provisions stipulated in the Ogra Ordinance, LNG Policy, 2006, and LNG Rules, 2007.

Also, the design and construction of the LNG terminal must be strictly carried out as per the technical standards specified in the LNG Policy and LNG Rules. To ensure that these requirements are met, Ogra was required to hold a public hearing before Sept 15.