Another scam: NAB initiates probe in $25b Mashal LNG project

May implicate federal ministers and top officials of petroleum ministry, gas utility.

Zafar Bhutta June 09, 2012


National Accountability Bureau (NAB) has finally sprung into action on the multi-billion-dollar Mashal Liquefied Natural Gas (LNG) import project – beginning a probe that may involve a number of federal ministers and high-ranking bureaucrats.

Official sources allege that the investigation initiated by NAB could implicate Federal Minister Petroleum Dr Asim Hussain, former federal minister petroleum Syed Naveed Qamar, former special secretary petroleum ministry GA Sabri and former project director SSGC Naeem Sharafat, in a multibillion dollar scam.

The LNG import project was mired in controversy, from the dubious inclusion of Shell and the ignoring of qualified bidders to the unbundling of the project. The multibillion dollar deal was awarded to Dutch firm ‘4 Gas’ and French firm ‘GDF’, only to be scrapped after the case landed in the Supreme Court

According to sources, NAB has taken into custody the record of the Mashal LNG project from the Ministry of Petroleum and Natural Resources for its probe. “NAB sought a brief on the Mashal LNG import project and the ministry provided it,” Secretary Petroleum Ijaz Chaudhry confirmed.

NAB has also sought the report of an inquiry committee formed by Prime Minister Yousaf Raza Gilani to probe the deal. “The inquiry report had implicated petroleum minister Dr Asim Hussain in the LNG scam. He had initiated the short term LNG project-2, which the committee terms a major cause of stalling the Mashal LNG project,” an official said requesting anonymity.

However, a senior official of the petroleum ministry, dispelling the involvement of Dr Hussain in the scam, said that Sui Southern Gas Company (SSGC) wanted to strike a direct deal for LNG import without inviting bids – which was in violation of Public Procurement Regulatory Authority rules. However, in July 2009, the petroleum ministry blocked the SSGC’s move and asked it to invite Expressions of Interest (EoIs) with the approval of then adviser to prime minister on petroleum and natural resources, Dr Asim Hussain, to ensure transparency in the project.

In response to the EoIs for short term LNG import project-2, a consortium of Vitol and Fauji Foundation emerged as the lowest bidder when the Mashal LNG project was tabled before Economic Coordination Committee (ECC) for approval. Naveed Qamar was petroleum minister at that time.

A tussle emerged between Qamar and GA Sabri, who was in favour of tabling a proposal of Vitol/Fauji Foundation to ECC along with Mashal LNG import project, while Qamar sought the ECC’s approval to engage Shell in the project.

The other factor said to have led to LNG scam was the unbundling of the import project, for which Sabri is responsible. When contacted, the former special secretary, who was the principal dealing officer of the Mashal Project, said: “Yes, I had unbundled the LNG import project after the approval of the competent authority.”

He said that if the project was retendered, LNG imports could have been delayed for three to four years. Regarding the investigation committee, he said: “I have never been called despite being the principal dealing officer.”

Another official said that Shell had qualified for the Mashal project by obtaining 91 points in the evaluation process. However, the ECC gave the nod to 4Gas, which had 49 points. SSGC also selected 4Gas which was a terminal operator whereas Shell had an LNG contract in Qatar.

Defending the move, an SSGC official said that Shell had sought sovereign guarantees for the LNG import project and therefore backed out. However, sources said the country had to submit sovereign guarantees even in the case the project was awarded to 4Gas.

Published in The Express Tribune, June 9th, 2012.


blaizebob | 10 years ago | Reply


Goes just as well for PML and it's over-lords. Only thing different might be the scale.

ho Ho Ho | 10 years ago | Reply

This whole CNG shortage is a bluff too. It is a fact that CNG uses natural guess whereas it should have been used for fertilizer and power generation. But this government is trying to make people switch over to LNG. They have set up their shop for selling LNG including import, supply and retail and have created a premature CNG shortage. Soon CNG users will switch to LNG and these ministers, bureaucrats and politicians will be rolling in money.

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