The Oil and Gas Development Company Limited (OGDC) is reportedly letting Sui Southern Gas Company cut the line and receive LPG from one of its fields while other companies wait for their turn.
The country’s largest oil and gas explorer decided to supply LPG extracted from Kunnar Pasaki Deep field to all LPG marketing companies on a turn-by-turn basis, but this has changed and now SSGC-LPG is getting priority that may spark a controversy,” an industry source said.
“Rest of the companies have to wait for at least five days before receiving a second supply while SSGC is lifting supplies back to back, industry sources said adding that this preferential treatment has upset other companies.
SSGC entered the LPG business last year after purchasing Progas’ import terminal for a staggering Rs2.2 billion. The gas provider for the southern part of the country has been lobbying for exclusive rights to 120 tons per day of LPG from OGDC’s field Kunnar Pasaki that started operations earlier this year. The move contradicts Lahore High Court’s ruling that forbids state-owned gas utility companies from getting exclusive LPG rights from state-owned oil and gas explorers like OGDC.
OGDC official while talking to The Express Tribune ruled out any preferential treatment was being given to SSGC-LPG. He said the management decided to supply LPG to all companies from Kunnar Pasaki till the allocation of gas through bidding process is done.
Utility also eyes another
“In addition to this, SSGC has also demanded supply of 25 tons LPG from OGDC’s Adhi field that is already allocated to some LPG marketing companies,” reveals a letter written by SSGC-LPG, a copy of which is available with The Express Tribune.
Officials have confirmed that LPG extracted from Adhi is already committed to five LPG companies that have paid a hefty signature bonus and have entered into profit sharing arrangements with the producer. “Inducting a sixth company would violate OGDC’s existing commitments and may lead to litigation,” industry sources said.
A senior official of SSGC told The Express Tribune that the gas utility placed the request before OGDC to meet requirement for its LPG air mix plants. “We have four LPG air mix plants and are working to install another 100 MMCFD LPG Air Mix plant that would require 2,000 tons LPG,” official said.
“We have also requested LPG supply from Adhi field but this will probably be declined due to allocation of supply to some other companies already,” he added.
“We want the government to give priority to public sector companies and provide relief to consumers but the plan has not worked due to the stay order in court,” he said.
Published in The Express Tribune, May 30th, 2012.
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