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ISLAMABAD: The Oil and Gas Regulatory Authority stated here on Thursday that it had awarded construction licences to three LNG developers, including Pakistan Gas Port, Engro and Global Energy, for LNG imports and the first gas import in the country is scheduled to start within eight months.
Stating this at a press conference, the acting chairman of Ogra, Sabir Hussain, maintained that the authority had tried its level best to ensure transparency in awarding licences. However, if LNG developers failed to meet their commitment to bring gas to the country within the scheduled time as per terms and conditions, strict action would be taken against them.“They can face cancellation of capacity allocation and forfeiting of bank guarantee worth $10 million to be deposited by each LNG developer,” said Mr Hussain.
The Ogra, he said, has finally allocated pipeline capacity to these companies. However, the Sui Southern Gas Company (SSGC) and the Sui Northern Gas Pipeline Limited (SNGPL) would have to lay a separate line to cater to the additional gas load after the LNG starts flowing into the system. Both the companies have estimated that the cost of establishing a new pipeline would be between $1.2 billion and $1.4 billion from Karachi to Central or Northern Punjab.
The acting chairman claimed that authority faced pressure from different quarters, but said that Ogra is an autonomous body, it would continue to work under the supervision of Cabinet Division to handle the entire LNG project in a transparent manner with a prudent approach.
Member Gas (Ogra) Mansoor Muzaffar informed that a total of 1.4 billion cubic feet (bcfd) would be imported by the three LNG developers as per allocations by Ogra, which includes 500 mmcfd to Global Energy Pakistan, 400 mmcfd to Pakistan Gas Port and 500 mmcfd to Engro.
He said that the Global Energy Pakistan had given time-line to bring first consignment of 500 mmcfd imported LNG in the country by the end of June 2012, Engro up to December 2012, while Gas Port would be able to inject its imported LNG in the system in the first quarter of 2013.
“Ogra will submit a final draft of the Third Party Access Rules 2011 finalised with the consultation of stakeholders to the federal government on Friday for notification,” he added.
According to terms and conditions decided between Ogra and three LNG developers, firm commitment from LNG buyer was to be provided within 90 days of capacity allocation and performance bank guarantee of $10 million, en-cashable in Pakistan to be furnished within 90 days of capacity allocation.
The SNGPL and SSGC would start investing in capacity enhancement after the receipt of performance bank guarantee from a bank acceptable to Ogra and encashable in Pakistan, as well as engineering contract and design along with detailed schedule, and time-line would be submitted within 15 days of capacity allocation.
LNG developers would be required to submit an agreement with credible LNG suppliers within 45 days of capacity allocation, which is by the mid of December, 2011.
By A Reporter
