OGRA issues licences for sale of gas

Licences allow companies to utilise idle capacity of LNG terminal

ISLAMABAD:

The Oil and Gas Regulatory Authority (Ogra) on Tuesday issued licences for sale of natural gas/ liquefied natural gas (LNG) to two private sector companies while rejecting concerns of Pakistan LNG Limited (PLL).

The regulator granted licences to Tabeer Energy Marketing (Pvt) Limited and Energas Marketing (Pvt) Limited for utilising the unutilised/ idle capacity of an LNG terminal.

Both companies plan to import LNG by utilising the idle capacity available at the terminal.

Ogra was of the view that by utilising the idle capacity, the two companies would help mitigate the annual losses suffered by the federal government in the form of capacity charges to the terminal as well as lost revenue due to under-utilisation of Sui pipeline network. The licences are aimed at sale of natural gas/ RLNG to consumers (industries, power plants and licensed CNG stations) for an initial period of 10 years with effect from January 8, 2021 unless revoked earlier.

The licensees are entitled to the receipt of RLNG/ natural gas price in accordance with the government’s policy guidelines issued from time to time. The companies have been given a year’s time to fulfill certain conditions for the start of operations, otherwise, their licences shall stand cancelled or revoked.

They have to sign agreements with Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipelines Limited (SNGPL) including a service agreement for metering and safety issues.

In addition, the two companies will sign an agreement for LNG supplies. They are also liable to pay a fee of 0.25% of the annual turnover/ estimated turnover on the sale of natural gas in respect of the most recent financial year.

Published in The Express Tribune, January 13^th, 2021.

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