Sindh smells a rat in import of ‘expensive’ LNG

Published March 28, 2015
CM says the federal govt did not consult the Sindh on the LNG import issue as well as its distribution and pricing
—APP/File
CM says the federal govt did not consult the Sindh on the LNG import issue as well as its distribution and pricing —APP/File

KARACHI: Expressing concern over the import of expensive Liquefied Natural Gas without taking his government into confidence, Sindh Chief Minister Syed Qaim Ali Shah said on Friday that the provincial government wanted an urgent meeting of the Council of Common Interests to discuss the controversial issue.

Accompanied by Finance and Energy Minister Syed Murad Ali Shah, the CM told a press conference that his government also decided to approach the Supreme Court for a stay order against further import of the LNG and against the implementation of a decision of the cabinet committee on energy (CCoE) to construct three LNG-based power plants in Punjab from the federal public service development programme.

He said that the federal government did not consult the Sindh government on the LNG import issue as well as its transmission, distribution, health safety, environment protocols and pricing and tariff regime.

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He said that the federal government did not respond to the letters written to the prime minister and the minister concerned.

Terming the decisions made by the ECC and CCoE regarding LNG import ‘unconstitutional’, the CM said that the Sindh government believed that the CCI was a competent forum to deliberate and decide all matters related to LNG.

He conceded that there was scarcity of gas, but added that the Sindh government was not consulted over import of the LNG despite the fact that 70 per cent of natural gas was being produced in Sindh.

He said that he came to know about the first shipment of LNG at the Port Qasim from the media.

He also said that there were reports that the gas being produced in Sindh would be supplied to Punjab while imported LNG would be sold in Sindh after mixing it with locally produced gas, which would not only be costly but also low quality.

“At the moment we are unaware of the price to be fixed for the gas after mixing it with locally produced gas. According to reports, the price had been fixed by the cabinet committee although constitutionally it is the exclusive subject of the CCI,” he added.

Referring to a Sindh High Court decision that the province in which a natural gas wellhead is situated should have precedence over other parts of Pakistan in meeting requirements from that wellhead, the CM said: “A question arises as to why the gas produced in Sindh would not be allowed to be utilised in Sindh. We don’t want injustice with anyone, including our people, and therefore LNG be distributed in the areas for which it is imported.”

“We don’t want a fight over the issue with the federal government, but at the same time we could not allow others to usurp the rights of our people,” he added.

He said compared to imported LNG, the natural gas produced in Khairpur and Dadu gas fields was far valuable and therefore it was not justified that the Sindh gas was supplied to Punjab and imported LNG be left for Sindh.

Finance Minister Shah said that under the 18th amendment to the Constitution, the CCI ought to meet on a quarterly basis but unfortunately during the last two years only three meetings had been held.

He said that Sindh produced over 70 per cent of the country’s natural gas and it did not require LNG. “Sindh’s requirement can be met from its own resources if all gas produced in Sindh is allocated to it.”

He said that the federal government claimed that the LNG was an import item under entry No 27, part-I, 4th schedule and as such it was a federal matter. However, the Sindh government rejected this contention as it believes that the Constitution does not categorise natural gas as indigenous or imported and LNG once having landed at the Port Qasim comes under the purview of the CCI under Article 154 of the Constitution.

The minister said that the CCoE had unconstitutionally decided to construct LNG-based power plants in Punjab from the Federal PSDP ignoring the fact that both electricity and natural gas fell within the ambit of the CCI.

He demanded that the Oil and Gas Regulatory Authority (Ogra) be reorganised by amending the Ogra Ordinance 2002 and all provinces be allowed equal representation in it.

A written paper was also distributed highlighting the contention of the Sindh government and its demands.

Published in Dawn, March 28th, 2015

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