In the frying pan: LNG import tender controversy flares up

Participation of Chinese blacklisted company violation of rules, says bidder.

ISLAMABAD: Controversy over a Liquefied Natural Gas (LNG) service contract has arisen after the Pakistan Gas Port Limited (PGPL) announced that participation of China Harbour Engineering Company (CHEC), an Engro Corporation partner that has been debarred by the World Bank, is in violation of the Public Procurement Regulatory Authority (PPRA) rules and tender requirements.

In a statement issued, PGPL said that the previous tender for the LNG contract did not contain this clause. However, Section 33.2 of the LNG Services Agreement unequivocally states that no company or its affiliates or agents may participate in the process if they “appear on any list of entities or individuals debarred from tendering or participating in any project funded by the World Bank, European Bank for Reconstruction and Development, or any other multilateral or bilateral aid agency.”

“As such, in accordance with the tender documents, CHEC cannot participate in this project. Declaring otherwise is both false and in blatant violation of PPRA rules and tender requirements,” PGPL said.

PGPL also rejected recent claims made by Elengy Pakistan Terminal Limited (ETPL), a wholly-owned
subsidiary of Engro Corporation, regarding the latest LNG tender in which only the two companies participated.

ETPL claimed to have offered the most competitive bid of less than $0.70 per million British thermal units (mmbtu), stating that this was much below PGPL’s price of $2.5 per mmbtu.

PGPL responded that its offer to Inter State Gas Systems (ISGS) is certainly not “$2.5 per mmbtu”.

It said that ISGS, through its short letter of November 6, informed PGPL that its multibillion-dollar consortium had not been prequalified. This letter did not delve into the specifics of why PGPL had not been qualified, it said.

Responding to claims that PGPL’s Engineering, Procurement and Construction (EPC) contractor “does not have the capacity and the experience to undertake projects of such nature and complexity,” PGPL says that its EPC contractor, Worley Parsons, has undertaken more than half of the world’s near-shore LNG projects – projects exactly similar to the one tendered.

Published in The Express Tribune, November 9^th, 2013.

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