Govt moves to clear hurdle in ambitious LNG import project

PM forms committee to provide legal cover to LNG imports.

ISLAMABAD: As the Oil and Gas Regulatory Authority (Ogra) comes under fire for allegedly blocking LNG imports, the prime minister on Thursday constituted a high level committee, headed by the law minister, to provide legal cover to LNG imports for power generation.

Chairing the energy committee meeting, Prime Minister Raja Pervaiz Ashraf also approved the Gas Policy-2012, which raises the priority of the supply for power generation, making it second only to the supply for domestic consumers. The prime minister also directed ministries concerned to expedite the issuance of terms financing certificates (TFCs) worth Rs82 billion against the reserves of the Oil and Gas Development Company Limited (OGDCL) to clear circular debt, which has once again reached the alarming Rs400 billion mark.

Talking to The Express Tribune, a meeting participant said Ogra came under fire by petroleum ministry authorities for being a stumbling block in the government-backed 800 million cubic feet gas per day (mmcfd) LNG import project. He added that Ogra Chairman Saeed Khan assured his cooperation in the project to overcome the energy crisis.

Ogra wants the government to hire a consultant to evaluate the project. The regulator also wants transparency and desires to push other LNG import projects already in the pipeline. However, the petroleum ministry says Ogra is not a policymaker. The ministry also wants a waiver in the Public Procurement Regulatory Authority  (PPRA) rules for the 800 mmcfd LNG import project.

“We are an independent regulator and therefore give an independent opinion,” Ogra authorities maintain, adding that it is up to the Economic Coordination Committee (ECC) to accept or reject the regulator’s opinion in decisions.

“Due to such controversies, the prime minister constituted a committee, headed by the Law Minister and including the cabinet and petroleum secretaries along with the Ogra chairman, to develop consensus on the import of LNG,” sources said, adding that an earlier such committee had failed to develop consensus.

Meanwhile, the premier, while approving Gas Policy-2012, directed the petroleum ministry to ensure uninterrupted fuel supply for power generation. The premier’s adviser on petroleum Dr Asim Hussain, briefed him on the arrangements made in this regard. Hussain said additional gas will be available to state-owned power plants from today(Friday).

Published in The Express Tribune, July 13^th, 2012.