Pipeline network: Three LNG importers allowed access
State-run companies to invest up to $1.4b in laying gas lines.
ISLAMABAD:
The Oil and Gas Regulatory Authority (Ogra) has allowed three liquefied natural gas (LNG) importers to use the pipeline network of state-run gas distribution companies for transporting LNG to the consumers.
However, the gas distributors – Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipelines Limited (SNGPL) – will have to invest $1.2 to $1.4 billion to lay new pipelines to create room for LNG suppliers. The cost is higher than the expenses of around $1.2 billion expected to be made on constructing Pakistan’s portion of the pipeline under the Iran-Pakistan gas supply project.
Speaking at a press conference, Ogra Acting Chairman Sabir Hussain said the authority tried its best to ensure transparency and discourage favouritism in the award of licences to the three LNG importers including Pakistan Gas Port, Engro and Global Energy Pakistan.
“If LNG project developers failed to meet the commitment of bringing gas into the country within schedule, they can face cancellation of capacity allocation and encashment of bank guarantee worth $10 million each,” he warned.
Referring to severe pressure from different giants which he did not name, Hussain stressed that Ogra was an autonomous body and would continue to work under the supervision of Cabinet Division to handle in a transparent manner the entire LNG project which included infrastructure building, import and supply to consumers.
Ogra’s Member Gas Mansoor Muzaffar said the LNG importers would be able to supply 1.4 billion cubic feet per day (bcfd) of gas through the pipeline network of SSGC and SNGPL as Global Energy had been allocated pipeline capacity for 500 million cubic feet per day (mmcfd), Pakistan Gas Port got capacity for 400 mmcfd and Engro for 500 mmcfd.
He said Global Energy would be able to import its first consignment of 500 mmcfd by the end of June 2012, Engro would bring gas by December 2012 while Gas port would be able to add LNG to the network in the first quarter of 2013.
“Ogra will submit a final draft of Third Party Access Rules 2011, finalised in consultation with the stakeholders, to the government today (Friday) for issuing a notification,” he added.
According to the terms and conditions, the LNG importer will submit a firm commitment and furnish performance bank guarantee of $10 million, en cashable in Pakistan, within 90 days of capacity allocation.
SSGC and SNGPL will start investing in enhancing their pipeline capacity after receipt of performance guarantee from a bank. The LNG buyer will also provide the engineering contract and design along with detailed schedule and timeline within 15 days of capacity allocation.
The LNG importer will submit the agreement reached with a credible supplier within 45 days of capacity allocation and the implementation agreement reached with the Port Qasim Authority within 30 days of capacity allocation.
Published in The Express Tribune, October 28th, 2011.
The Oil and Gas Regulatory Authority (Ogra) has allowed three liquefied natural gas (LNG) importers to use the pipeline network of state-run gas distribution companies for transporting LNG to the consumers.
However, the gas distributors – Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipelines Limited (SNGPL) – will have to invest $1.2 to $1.4 billion to lay new pipelines to create room for LNG suppliers. The cost is higher than the expenses of around $1.2 billion expected to be made on constructing Pakistan’s portion of the pipeline under the Iran-Pakistan gas supply project.
Speaking at a press conference, Ogra Acting Chairman Sabir Hussain said the authority tried its best to ensure transparency and discourage favouritism in the award of licences to the three LNG importers including Pakistan Gas Port, Engro and Global Energy Pakistan.
“If LNG project developers failed to meet the commitment of bringing gas into the country within schedule, they can face cancellation of capacity allocation and encashment of bank guarantee worth $10 million each,” he warned.
Referring to severe pressure from different giants which he did not name, Hussain stressed that Ogra was an autonomous body and would continue to work under the supervision of Cabinet Division to handle in a transparent manner the entire LNG project which included infrastructure building, import and supply to consumers.
Ogra’s Member Gas Mansoor Muzaffar said the LNG importers would be able to supply 1.4 billion cubic feet per day (bcfd) of gas through the pipeline network of SSGC and SNGPL as Global Energy had been allocated pipeline capacity for 500 million cubic feet per day (mmcfd), Pakistan Gas Port got capacity for 400 mmcfd and Engro for 500 mmcfd.
He said Global Energy would be able to import its first consignment of 500 mmcfd by the end of June 2012, Engro would bring gas by December 2012 while Gas port would be able to add LNG to the network in the first quarter of 2013.
“Ogra will submit a final draft of Third Party Access Rules 2011, finalised in consultation with the stakeholders, to the government today (Friday) for issuing a notification,” he added.
According to the terms and conditions, the LNG importer will submit a firm commitment and furnish performance bank guarantee of $10 million, en cashable in Pakistan, within 90 days of capacity allocation.
SSGC and SNGPL will start investing in enhancing their pipeline capacity after receipt of performance guarantee from a bank. The LNG buyer will also provide the engineering contract and design along with detailed schedule and timeline within 15 days of capacity allocation.
The LNG importer will submit the agreement reached with a credible supplier within 45 days of capacity allocation and the implementation agreement reached with the Port Qasim Authority within 30 days of capacity allocation.
Published in The Express Tribune, October 28th, 2011.