The LNG import saga continues

Shahbaz Rana April 11, 2010

ISLAMABAD: Federal Minister for Petroleum and Natural Resources Syed Naveed Qamar said on Saturday that the country would suffer a loss of US $1.33 billion over the next five years if the contract to import LNG was awarded to the Fauji Foundation and Vitol, as the joint bid was higher than the bid of GDF Suez which won the contract.

“I preferred to remain silent till the findings of the Committee and now that the report has been made public, so I decided to speak on the baseless story which had alleged that the award of contract of GDF had the potential to cause a loss of over a billion dollars,” the minister said. He was addressing the press briefing after the report of Standing Committee of National Assembly on Petroleum and Natural Resources was made public.

“The deal with GDF Suez to import 3.5 million tons of LNG through the Mashal Project is substantially cheaper contract will be formally signed on April 15, 2010 in case no more snags appear, “he added.

To a question as to why the bid of the consortium of FF/ Vitol was not included in the Economic Coordination Commission (ECC) summary, the minister said that the consortium had actually submitted its bid not for the Mashal terminal 1, but for terminal 2 which the ministry will consider now that the ECC has approved the installation of terminal 2 for import of more LNG.

The minister said that the news story was based on half truth not the full truth. The minister showed the report of the committee to the media and said that the standing committee concluded that the allegation leveled against the Ministry of Petroleum and Natural Resources were not based on facts.

“The committee is also of the view that such mega projects are of national importance and casting aspersions on them without any evidence will not only jeopardise the transaction, but also embarrass the state”. He said that the committee’s findings proved that the news report was not based on any documentary evidence but on the summary and minutes of the ECC adding that the summary was also misread when the correspondent made the statement before the committee.

Qamar categorically denied that he used any influence to get results in his favour.

Adding that the NA Standing Committee was headed by Sheikh Waqqas who belongs to PML (Q) and comprises opposition members who are extraordinarily vocal against the government.

The Managing Director of the Fauji Foundation recording his statement to the committee said that their bid was not the lowest one. Qamar said that international companies dealing with the LNG expressed resentment about the revelation of their pricing formulae, as they consider such things as their business secrets.

However, the report of the committee provided in the press briefing has also recommended to the government that in future all laid down procedure should be followed to ensure transparency