ISLAMABAD: The Public Accounts Committee (PAC) on Wednesday examined the audit report for the year 2020-21 of Liquefied Natural Gas (LNG) and Regasified LNG (RLNG) prepared by the Ministry of Petroleum Division.

The PAC met at the Parliament House with Member National Assembly Rana Tanveer Hussain in the chair.

The Petroleum Division secretary briefed the committee about the background of LNG and RLNG market, global spot of LNG market, gas supply to economy and the LNG market value chain challenges.

He informed the committee that LNG was being imported by Pakistan State Oil (PSO) and Pakistan LNG Limited (PLL), with the former importing an average of six cargoes per month.

He added that challenges of Pakistan’s LNG market included relationship between Petroleum and Power Divisions which is not on take-or-pay basis. The Annual Delivery Plan was based on assumption of stakeholders but fluctuates continuously, he added.

The official said trading in LNG futures required financial guarantees which PSO and PLL were not able to provide due to circular debt issues.

Other challenges including downstream agreements with consumers were not on take-or-pay basis amid fluctuating demand.

The committee chairman said the ministry should ensure gas availability during winter. He said the ministry could reduce losses by efficiently utilising its capacity.

Secretary Petroleum said five new blocks were given to Oil and Gas Development Company Limited.

The committee recommended to expedite recovery in irregular reimbursement of other charges to LNG sellers worth Rs2,231 million.

The management explained that PLL has recovered $12.7m from several LNG suppliers.

The committee also recommended to recover the remaining amount. It further sought a report within a month. The committee also settled all other highlighted audit paras of ministry of Petroleum Division.

Published in Dawn, August 26th, 2021