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New gas firm to use Sui Southern pipelines


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ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) recently issued the first-ever private sector distribution licence for natural gas sales in Sindh to a company incorporated just one day before the licence was granted.

The Karachi-based firm — Gaseous Distribution Company (GDC) — will be the first company ever to share the decades-old pipeline network of Sui Southern Gas Company Limited (SSGCL) and challenge its distribution and sales monopoly.

The GDC was registered with the Securi­ties and Exchange Commission of Pakistan (SECP) on Dec 21 and granted a 10-year distribution licence on Dec 22.

Licence issued just one day after company’s incorporation

The SSGCL had not given a No Objection Certificate (NOC) for network-sharing or signed any covenant with the GDC for network capacity-sharing when the distribution licence was issued by the regulator, sources in Ogra told Dawn.

Under the licence, the new company is expected to purchase liquefied natural gas (LNG) from a future terminal operator or Pakistan State Oil (PSO) and sell it to select consumers, including CNG stations.

Ogra had conducted a public hearing to grant the distribution licence to the Pak Gas Distribution Company on Dec 14. The name was opposed by the PSO, saying there was a “clear intent to [deceive] the general public and especially PSO’s customers of ‘Pak Gas’ which is well-known brand” of the PSO.

On Ogra’s advice, the owners/directors of Pak Gas Distribution Company changed their nomenclature and applied for registration as Gaseous Distribution Company. The SECP incorporated the renamed company on Dec 21 and the procedure for issuance of the licence was initiated and completed on Dec 22.

Those familiar with the process suggest there should have been a fresh hearing for the new name and the licence should have followed an NOC on the network sharing by the SSGCL. Sui Southern and the Sindh government have been opposed to the use of LNG, saying the province had sufficient gas to meet consumption.

Ogra wrote that the petitioner (GDC) had submitted “the application for change of name from ‘Pak Gas Distribution Company Pvt Limited’ to ‘Gaseous Distribution Company (Pvt) Limited’ dated 22-12-2016 along with certificate of incorporation of petitioner’s company after change of name as ‘Gaseous Distribution Company (Pvt) Ltd’ dated 21-12-2016, duly signed by joint registrar/in charge SECP”.

This meant the incorporation was completed a day before the application was filed.

Decision defended

Ogra chairperson Uzma Adil Khan defended the decision to issue a fresh gas distribution licence for Sindh. She confirmed that the PSO had objected to the Pak Gas name and that Ogra sustained the objection, even though Pak Gas was not registered to the PSO.

Asked why a fresh hearing was not conducted for the renamed entity, the Ogra chief said that the licence was issued on Dec 22 because Ogra Member (Gas) Aamir Naseem was set to retire the same day.

In the past, she explained, there were public hearings on various issues but decisions could not be made on critical matters because of lack of quorum, which nullified the proceedings. Therefore, she said, it was decided that all three Ogra members should sign all decisions where they had completed the public hearing process, otherwise the entire process would go to waste.

She said a fresh hearing for the new name was not required because all other particulars of the company, including names of share­holders and directors, remained unchanged.

Ms Khan claimed that terms and conditions of the licence issued to the GDC were no different from a distribution licence issued for the SNGPL’s network to the Universal Gas Distribution Company a couple of years ago.

Published in Dawn, January 9th, 2017

Comments (21) Closed

taha Jan 09, 2017 08:08am

what was the amount of Bond to state bank?

VIJ Jan 09, 2017 08:22am

Let Indian companies also participate in gas exploration and transportation which will give better service

Sarwar, USA. Jan 09, 2017 08:25am

Who owns Gaseous Distribution Company (GDC) ??? Looks like more business for high ups...

Houlbelat Jan 09, 2017 08:30am

What is the political driving force behind such a lucrative business that has been awarded and orders issued without caring for any due process or examining implications?

Aftab ahmed shah Jan 09, 2017 09:19am

License issued with super efficiency suggests ownership of the new company has vast resources at its disposal plus enormous ability to influence Ogra management. Whereas news item gives some details such as PSO objection & change of company's name but no mention of the directors, managers.

Imran ali Jan 09, 2017 09:27am

there is no check and balance in the system of governance both PPP and PML INVOLVED IN CORRUPTION

Ahmad Fatah khan Jan 09, 2017 10:00am

OGRA laws says if a firm is financially and technically viable than it gets the license.

In this case if no NOC is given by SSGC, that means it is not technically viable since it won't be able to move it's gas.

Regarding financially viability it's financial statement ( in this case not possible since new entity) or amount of capital inducted by the share holders needs to be checked.

Sodomite Jan 09, 2017 10:06am

Great news. Zardari is back. Geo PPP Hazaroon Sal.

hani khan Jan 09, 2017 10:23am

Who owns Gaseous Distribution Company (GDC)?

zafar ahmed Jan 09, 2017 11:23am

Who are the owners of this newly born company and what basis OGRA awarded the contract/license with out a pre-qualification process & competitive bidding and one thing , which very much dubious that "Licence issued just one day after company’s incorporation" !

Iqbal afatab Jan 09, 2017 12:22pm

Another Mega Scandal in the Making before Elections!

Whom the Sole Beneficiary behind this onshore Company?

Anyhow; This is The Pakistan!

Iqbal afatab Jan 09, 2017 12:28pm

These are the reasons to put the Authorities under the Ministries! Anyone!

Maqood Jan 09, 2017 12:49pm

May be someone special owner.

Maqood Jan 09, 2017 12:45pm

every impossible is possible for beloved one in politics

Dr. SalariA, Aamir Ahmad Jan 09, 2017 01:03pm

What a serious joke? As they say, for sure, something is wrong and fishy there.

Kanwarch Jan 09, 2017 01:20pm

There are mafia political gangs looting the country and everyone is silent. Price will be heavy for our future generations while the ruling elite will settle abroad with their ill gotten wealth

South Asia Jan 09, 2017 01:18pm

"incorporated just one day prior" This statement reeks of something fishy and smells of corruption..No floating tenders, No looking for the best bidder, No Background checks, just gave away the rights.

Khayyam Jan 09, 2017 03:23pm

Why are they selling it or for that matter issued a license to a private company?

Abdul Mateen Jan 09, 2017 03:37pm

Totally a shady deal !

Dr. Sheila Jan 09, 2017 03:53pm

SSGC should challenge it in the court.

I m Pakistan Jan 09, 2017 04:50pm

I applied for a domestic connection in 2012 and i m told that my turn has yet to come. What is bad about iit if some challenger comes to break the mutiny of SNGPL. I want similar company in North as well. We want emancipation from dacoits sitting in grab of employees of SNGPL. It's a common feature in world as commercial distributions. we need to give tough time to these manipulators by introducing competition.