ISLAMABAD: Two top global LNG suppliers have stayed away from participating in the bid to procure 200 million cubic feet per day (mmcfd), following a case taken by National Accountability Bureau (NAB) on LNG terminal and imports from Qatar.
Officials familiar with the development say that global investors were not taking interest in Pakistan’s LNG market following NAB’s activism regarding LNG projects. Pakistan LNG Limited (PLL) had invited bids for supply of 240 LNG cargoes over a period of 10 years with the arrival of two cargoes a month.
Only four companies participated in the tender as they had been qualified in technical bids. These companies included Italian energy giant Eni, Trafigura, Socar of Azerbaijan and Chinese firm PetroChina. “Two global LNG suppliers, who are also LNG producers, purchased tenders, however, the arrest of former prime minister Shahid Khaqan Abbasi raised fears among global LNG suppliers,” said officials, adding that these two global LNG suppliers stayed away from submitting bid documents to participate in the tender.
The Petroleum Division spokesman confirmed to The Express Tribune that there were four tender companies. Responding to a question, he said, “You would have to ask the bidders/suppliers about NAB fears.”
Officials said that out of these four companies, three were traders and only ENI was an LNG producer. Following the NAB cases regarding LNG terminal, two LNG traders were not taking interest in LNG contract. The officials remarked that the NAB cases had not only harassed local investors but foreign investors were also not willing now to invest in Pakistan. The foreign investment has taken a hit and has been declining during the Pakistan Tehreek-e-Insaf’s (PTI) tenure, raising serious concerns. In light of these, the government is now working to amend the NAB ordinance to protect businessmen. The NAB chairman has also announced not to take cases of taxes against businessmen.
Pakistan had been trying to set up an LNG terminal for decades, and it managed to set up two during the Pakistan Muslim League-Nawaz government’s rule. The LNG terminal was set up in 2015 and it was a pilot project that opened the LNG market of Pakistan for the global investors. However, the anti-corruption watchdog had taken the case against this terminal and an investigation was ongoing.
Keeping in view the energy woes of the country, the previous government started work on the first LNG terminal with a view to complete corporate formalities. The Inter State Gas Systems (ISGS) Board in its 76th meeting had authorised ISGS to assist the procurement process for the provision of LNG tolling services for and on behalf of Sui Southern Gas Company (SSGC) and utilise consultancy services arranged by the USAID.
Given the availability of technical assistance through USAID and following the decision of ISGS Board that the LNG project related activities will be handled by ISGS, the Petroleum Division had advised the USAID mission of Pakistan to advise the consultant (QED) to coordinate/interact with ISGS instead of SSGC for development of RFP and other LNG related activities.
After the opening of bid, technical bids were handed over to the consultant for technical evaluation, while the financial bids were retained in the safe custody of ISGS. The consultant concluded that the proposal submitted by Elengy Terminal Pakistan Limited (ETPL) for the Fast Track Project is competitive.
The officials said that since it was a pilot project there could be some procedural flaws but the intention was not bad. Hence, in the proposed amendment of the NAB Act, it has been proposed to focus on financial benefits rather than procedural flaws, the officials added.
Published in The Express Tribune, September 10th, 2019.