Investigative report findings: Faulty compressors wreck Qadirpur gas field project

Performance test indicates machinery installed to improve production was malfunctioning.

ISLAMABAD:

A project worth $42 million launched by the Oil and Gas Development Company Limited (OGDC) to save the Qadirpur gas field from a complete collapse has washed out after the modified compressors installed to improve production failed to deliver.

The performance test indicated that compressors installed to improve production were malfunctioning, according to an official report. The tests of all 14 modified compressors installed at Qadirpur field were found to be unsatisfactory, the report stated — a fact that indicates further gas shortage in the country.

The fallout of non-functional compressors has pressed a Rs4 billion dent on the public exchequer and has diminished chances of arresting the downslide in pressure and consequently gas production from Qadirpur – the country’s third largest gas reservoir.

The performance report, a copy of which is available with the Express Investigation Cell (EIC), indicates harder days ahead for gas consumers since gas supply from Qadirpur is going to be much less than the anticipated target levels.

The OGDC’s assessments done earlier had indicated that the depleting Qadirpur facility would need compressors by early 2008 to increase gas pressure. Despite a clear picture of an imminent disaster, the OGDC delayed compressors’ procurement till 2010. OGDC detractors attribute the delay to what they allege is a hunt for a party that would presumably accept its under-the-table demands.

Sources said Qadirpur compressors project went through different phases between 2008 and 2010. Firstly, the contract was awarded to a Chinese company for installing front-end compressors which was later annulled for no obvious reason. In 2009, the project was tendered again but it met the same fate.

Finally, the contract was awarded to M/s Valerus in 2010. Happy with finding a party of their choice, OGDC brushed aside required procedure of publishing a tender in newspapers, the only acceptable process to ensure competitive bidding to protect the national interest for a $40 million project.

Petroleum Minister Naveed Qamar, OGDC Managing Director Zahid Hussain, Project Director Basharat Mirza and Project Manager Zahid Bukhtiar allegedly played a key role in awarding the contract to M/s Valerus against Public Procurement Regulatory Authority (PPRA) rules. PPRA rules demand a press tendering for any development project that involve public money.

It has now been three-and-a-half months since the report was completed but the OGDCL’s project department has still not presented the findings to Managing Director Basharat Mirza.

Mansoor Mazzaffar, a senior government official presently serving as Member Gas in Oil and Gas Regulatory Authority (Ogra) can answer as to how a government official of deputy director rank with accounting background could check the highly technical supply of the compressors. The contents of the report are enough to establish that petroleum ministry and OGDCL officials have failed to protect the national interest in buying compressors from Valerus.

When approached for his views, Mirza was surprised to hear about the Qadirpur test report. He had no idea that Projects Department of OGDC had received the performance test report from Qadirpur field staff some three months back. “I’m seeing this report for the first time and have no idea what was the outcome of the test conducted for 14 compressors,” he said. He added, however, he would enquire into the matter and seek report from the department concerned on the performance of compressors costing over Rs2 billion to the national exchequer.

Published in The Express Tribune, February 3^rd, 2012.