LNG imports force closure of local gas fields

A parliamentary panel was informed on Monday that local gas fields were being shut down owing to continuous import of liquefied natural gas (LNG) from Qatar.

The Senate Standing Committee on Petroleum, chaired by Senator Umer Farooq, met at the Parliament House, where it received a briefing on the curtailment of gas supply from local fields.

It was highlighted that gas fields were being closed in the wake of an agreement with Qatar, under which 10 LNG cargoes were arriving each month.

The discussion also underscored the critical condition of pipelines, which were under immense pressure and at risk of bursting along with the lack of adequate storage facilities.

Following the exchange of views, Senator Umer Farooq emphasised the need for a detailed review of drilling operations and associated costs on a daily basis.

He recommended a comprehensive report on gas extraction and development work in different areas, the number of drilling operations conducted and the time frame for each of them. He also requested details of utilisation of corporate social responsibility (CSR) budget allocations and operational costs exceeding budgeted amounts.

In reference to the recommendations made on August 27, 2024, Senator Farooq aired concern over the long-delayed Iran-Pakistan gas pipeline project. While many goods continued to arrive from Iran without facing sanctions, development projects were subjected to restrictions, he noted.

Committee members expressed concern over the lack of clarity about the board of directors of petroleum companies. They recommended seeking guidelines from the Ministry of Finance on the matter as well as on the appointment of managing directors.

Senator Farooq also expressed his dismay over the absence of competent candidates for key positions and suggested that advertisements for such posts should be shared with the standing committee. The panel chairman directed officials to report back with a progress timeline. He also called for inviting representatives of the Ministry of Finance to get further clarity on the issue.

Committee members voiced concern over the failure of Oil and Gas Development Company Limited's (OGDCL) cell to issue production bonus and the violation of Supreme Court ruling.

It was informed that OGDCL was not obligated to pay the production bonus but committee members noted that though the matter had been addressed by the Supreme Court, the Ministry of Petroleum had yet to review the court's judgement. Additional secretary of the Petroleum Division assured the committee that court orders would be reviewed and a way forward would be charted accordingly.

The Senate panel was also briefed on financial and administrative irregularities, including details of inquiries conducted over the past three years. It was reported that the stealing of pipeline material at the Central Base Store in Manga by company officials resulted in a loss of nearly Rs380 million.

Similarly, the committee was informed about the Bannu West project, where the stolen civil material caused an estimated loss of Rs5 million. Additionally, the theft of industrial material scrap at CMS Lahore and the recovery of around Rs28 million were also reported.