ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet approved on Friday formation of a nine-member price negotiations committee to hold talks with Qatar Gas for import of liquefied natural gas (LNG) and decided to provide a sovereign guarantee of Rs17 billion for a transmission line.

A meeting of the committee presided over by Finance Minister Ishaq Dar also asked the commerce ministry to dispose of within 10 days a matter about the release of Rs2.6bn sought by the Trade Development Authority of Pakistan as inland transportation cost of sugar for export.

The petroleum ministry had sought formation of the committee for the import of LNG from Qatar – a fast track LNG services project between Sui Southern Gas Company Limited (SSGCL) and Engro Terminal Company.

The price negotiation committee headed by the secretary of petroleum and natural resources will comprise the Board of Investment chairman, secretaries of finance and water and power, a legal consultant and managing directors of PSO, SSGCL, SNGPL and Interstate Gas Company.

It will hold negotiations with Qatar Gas for a government-to-government deal on gas import and examine the results of LNG import price to be offered by bidders. Bids will be invited by SSGCL. The committee will compare the bid price with Qatar Gas under its agreement with Pakistan State Oil.

The finance mister directed the secretaries of finance and water and power to attend meetings of the negotiation committee and in case of their absence the nominees should not be less than additional secretaries because of the importance of the project.

The ECC approved in principle issuance of sovereign guarantee against financing facility of Rs17bn from local banks for a 500kv double circuit transmission line between Neelum Jhelum hydropower plant in Azad Kashmir and Gujranwala subject to approval of terms and conditions of borrowing by the finance ministry.

Under a directive by the prime minister, the first unit of 969MW Neelum Jhelum plant will come into operation by December next year for which the National Transmission and Despatch Company Limited (NTDCL) will have to complete the priority portion of the transmission line on or before Sept 30, 2015.

As the NTDCL is implementing the project from its own resources, local banks have expressed their willingness to provide funding against the sovereign guarantee by the government.

The ECC directed a committee led by Planning and Development Minister Ahsan Iqbal to expedite work on the national energy plan and submit a report in two months as promised by the committee on its inception about two months ago.

On a summary submitted by the petroleum ministry for allocation of extended well testing (EWT) of Wafiq X-I Gas to Pakistan Petroleum Limited for setting up a 50MW power plant, Finance Minister Dar asked the petroleum secretary to seek feedback from the Private Power and Infrastructure Board, National Electric Power Regulatory Authority and the law ministry and submit at the next meeting changes required in the power policy of 2009 for implementation of this proposal.

The ECC was informed that a committee headed by Water and Power Minister Khawaja Asif had prepared a draft of the auto industry policy which would be submitted at the next meeting for approval.

The meeting was also briefed on incidental and financial cost of imported urea. The finance minister directed that adequate gas supply be ensured for domestic fertiliser companies so that they could utilise their maximum production capacities.

He said that utilisation of installed capacity of the domestic fertiliser producers should be the first priority after calculating the actual demand because it would not only save the much needed foreign exchange and the amount given in subsidies but also strengthen the local industry.

The ECC was informed that national food security ministry had released Rs800 million to the Pakistan Agricultural Storage and Service Corporation for the purchase of 25,000 tons of wheat which would be distributed among the internally displaced persons under the World Food Programme.

Published in Dawn, August 16th, 2014