PESHAWAR: The Khyber Pakhtunkhwa government on Tuesday asked the Oil and Gas Regulatory Authority (Ogra) not to issue licence to the federal government-owned Inter-State Gas Systems (ISGS) for the countrywide supply of natural gas until the Council of Common Interest decides about the relevant pipeline routes, gas allocation and project agreements.

The Ogra had arranged a public hearing at a local hotel into the ISGS application for grant of licence for transmission of natural gas.

The hearing was arranged on the request of the members of the National Assembly and Senate from the province. However, not a single MNA, Senator or MPA showed up despite intimation.

Also, the provincial energy and power minister was conspicuous by his absence.

Says Ogra should examine request only after CCI decision on pipeline route, gas allocation, project accords

KP Oil and Gas Company Limited (OGCL) chief executive officer Mohammad Raziudidn represented the KP government during the hearing, where Ogra chairperson Uzma Adil Khan was in the chair. Orga member (finance) Noorul Haq and member (oil) Dr Abdullah Malik was also present on the occasion.

ISGS managing director Mobin Saulat asked for the licence saying his was a government entity and its job was to lay pipelines and compressor stations to receive gas and further distribute it.

He said the gas to be imported through TAPI, IPI and other initiatives would help meet the country’s gas shortfall.

Mr Saulat briefed participants about the technical and other aspects of the TAPI, IPI and North-South Gas Pipeline (NSGP) projects.

To a question from the chair, Mr Saulat said the gas distributors, including Sui Northern and Southern Gas Pipelines Limited, were responsible for developing own capacity to handle the additional gas to be pumped into their system following the gas importing projects completed and carry it to consumers.

In his presentation, Mr Raziuddin said the ISGS application was infructuous.

He said the ISGS relied on the Government Holdings Private Limited (GHPL), a government owned company, for its operational and capital expenditure, while the GHPL funds were to be used for the purpose of the oil and gas explorations and production purposes only.

Raziuddin said being an exploration and production company, it was completely against the company’s objective clause to invest in gas import.

He said licence shouldn’t be issued to the ISGC in case a single dollar GHPL was used for the company’s operational expenditure or transportation, storage and marketing projects.

“Mineral, oil, natural gas and electricity fall under the part-II of the Federal Legislative List and Constitution’s Article 154 clearly authorises the Council of Common Interest (CCI) to exercise supervision and control over institution related to matters falling in this part II of legislative list.

“Two regulatory authorities, including Ogra and Nepra, should fall under the control and supervision of the CCI,” he said.

Mr Raziuddin asked the Ogra not to issue licence to the ISGS until the CCI’s decision on pipeline route, gas allocation, framework and four projects agreement.

He also asked the authority to direct the GHPL to provide CCI approval for having a gas import subsidiary company.

He said the ISGC application was ultra vires as all projects, project routes, gas allocation, agreements and frameworks needed to be brought to the CCI for decision.

Mr Saulat, however, termed most of KP objections irrelevant and said they emerged due to lack of understanding and therefore, there would be no response to them.

He denied that the ISGS was using GHPL funds.

“The GHPL is routing channel only and they were not going to use its single penny on ISGC,” he said, adding that they had their own resources.

About KP objections to TAPI route, Mr Saulat said the distance was not the only consideration and they had to take security, terrain and connectivity and other issues into account before deciding a particular route.

He said at a time when they were discussing transmission lines, it would be premature to get into debate about the share of provinces.

“It is up to SNGPL and SSGC to decide,” he said.

The chair said the authority would decide the matter after examining all points of views.

Published in Dawn, August 23rd, 2017