Cabinet likely to okay fast-tracking of LNG deal

AFP




ISLAMABAD: The federal cabinet, which is scheduled to meet during the next week, is likely to accord its final approval for fast-tracking of the $1.2 billion worth liquefied natural gas (LNG) services agreement with Engro Vopak Terminal Limited (EVTL).
Well-placed sources said that a meeting of the federal cabinet which was scheduled to be held today (Friday) had been postponed due to non-availability of Prime Minister Nawaz Sharif. However, the upcoming meeting would be held during the next week in prime minister’s office to take some important decisions pertaining to LNG Services agreement, grant of MFN status to New Delhi and import of 3000mw Iranian electricity to Pakistan etc. Similarly, the next cabinet meeting would review the progress on implementation of Pakistan Production Ordinance, they added.
Earlier, the Federal Cabinet’s Economic Co-ordination Committee (ECC) had accorded its approval in principle on February 28 to a fast-track LNG services project subject to its approval by Prime Minister Nawaz Sharif after the Law Division submitted its comments to the ECC that there was no need to bring it to the ECC. The meeting was held under the chairmanship of the Finance Minister Ishaq Dar at Prime Minister’s Office and approved the summary of the Ministry of Petroleum and Natural Resources on the project to ensure first flow of LNG in November this year.
The petroleum ministry in its summary dispatched to the ECC had recommended permitting Sui Southern Gas Company Limited (SSGCL) to sign LNG services agreement with EVTL for building LNG handling facility at Engro’s existing terminal at Port Qasim-Karachi with tolling charges. Giving details of the proposed LNG services agreement, sources also said that Sui Southern Gas Company Limited (SSGCL) would pay 0.66cents/mmbtu to EVTL on account of terminal charges, as terminal would be used for re-gasification and storage purposes. The said agreement also includes certain conditions and the Engro would be responsible for putting its 400mmcfd capacity terminal operational within 11 months after the signing of the agreement. According to two major conditions of the agreement, the SSGCL would not pay any charges under the head capacity in case of no import of gas to the country. Secondly, SSGCL would not pay the price of gas likely to be wasted on account of technical losses, they added.
A board of SSGC on January 28 had achieved a major milestone towards bringing imported Liquefied Natural Gas (LNG) to the country by approving a plan for construction of new terminal for import of Liquefied Natural Gas (LNG) at Port Qasim to a subsidiary of Engro Corporation with certain conditions. The sources further told that upcoming federal cabinet would also take up the import of 3000mw electricity from Iran to meet burgeoning energy needs of the country.
“Country can ensure uninterruptible supply of electricity in the country only by looking at all avenues while import of electricity is a viable option besides making efforts for increasing the generation capacity,” top seated guru at power ministry said. He also said that the menace of load shedding would be controlled even eliminated to some extent by importing3000mw from brethren Iran.
Last week, the Al-Aqili Group, a Dubai-based international firm, offered to supply 3,000MW to Pakistan from Iran under a long-term contract and also signed a memorandum of understanding with the ministry of water and power in a ceremony witnessed by Minister for Water and Power Khawaja Mohammad Asif and Chief Executive Officer of the Al-Aqili Group Mohamed Saeed Al-Aqili. The group will also finance and lay transmission lines to add electricity to the national grid under the terms of the agreement.

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