Vested interests: Kunner-Pasakhi gas project likely to be scrapped

Oil and Gas Development Company may suffer loss of billions of rupees.


Zafar Bhutta June 01, 2011

ISLAMABAD:


The Oil and Gas Development Company Limited (OGDCL) is reportedly under pressure to scrap the entire exercise of awarding a multi-million-dollar engineering, procurement and construction contract for a gas exploration project that may cause loss of billions of rupees to company, it has been learnt.


The Kunner-Pasakhi Deep and Tando Allahyar Integrated development project was expected to produce 285 tons of natural gas per day, 387 tons of liquefied petroleum gas (LPG), 400 barrels of liquefied natural gas (LNG) and 4,500 barrels of crude oil.

Sources have told The Express Tribune that in order to implement the plan, a reshuffle has been made at higher levels in OGDCL and if successful, the scrapping of this contract will deprive the company of additional gas and oil as well as millions of rupees on account of ‘signature bonus’ on auction of LPG that may go to some private party.

Signature bonus refers to the bonus money that OGDCL receives from LPG marketing companies on sale of gas.

Sources pointed out that the plan was unveiled in a recent meeting held at the Ministry of Petroleum and Natural Resources.

OGDCL is being reportedly pressurised to scrap the tender for the project at a time when the company is close to awarding the contract. The oil and gas explorer has already spent millions of rupees on the project due to litigation process.

OGDCL has already opened bids submitted by Malaysia-based KNM and Hyundai Engineering Corporation for the gas exploration project.

OGDCL Managing Director Asif Sindhu, commenting on the developments, said no decision had been taken yet and all decisions would be taken in the best interest of the company in consultation with the petroleum ministry and after approval of the company board.

Sources said some officials of the petroleum ministry and OGDCL were divided over implementation of the gas extraction plan. Under the new plan, OGDCL is being asked to install two dehydration plants to extract 100 million cubic feet per day (mmcfd) of natural gas by December. Sui Southern Gas Company (SSGC) would have to lay a 35-kilometre pipeline to receive gas.

At the time of approving the project, sources said, the company board had also approved production of LPG without involvement of private party.

Earlier, the petroleum ministry had pressed OGDCL to scrap the Kunner-Pasakhi Development project by separating it from the Tando Allahyar project. In 2008, OGDCL had merged the two projects.

Published in The Express Tribune, June 2nd, 2011.

COMMENTS (2)

Hedgefunder | 12 years ago | Reply The rule is simple in any business !! It takes money to make money! Period.
NA | 12 years ago | Reply Vested interests: Another bad luck to this country.
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