Healthy finances: PSO to enter into LNG import business

Preparations under way to develop structure for gas purchase.

ISLAMABAD:

While regaining market share in petroleum products, Pakistan State Oil (PSO) is going to start importing liquefied natural gas (LNG) because of its sound financial health and will make arrangements with international suppliers and transporters to overcome energy crisis in the country.

“With respect to the government’s plan to involve PSO in the LNG project, the company will act as an LNG importer with responsibility to make arrangements with international suppliers and transporters,” PSO Managing Director Amjad Parvez Janjua told The Express Tribune in an interview.

The imported LNG will then be delivered to Sui Southern Gas Company (SSGC) – the state-owned gas distribution company – at the LNG terminal where it will be re-gasified and put into the company’s system.

Essential preparatory work had been initiated to develop the structure for import and implementation of the project, Janjua said.

Despite being struck by circular debt running into billions of rupees, PSO – a major importer of petroleum products – appears to be regaining its market share in petroleum products and is expected to post an increase in gross sales during July-December 2013 compared to the same period last year. Its share price has swelled 33% during the six-month period.



In the first quarter (July-September 2013) of the current financial year, PSO recorded a turnover of Rs364 billion, notching up 12% growth over the corresponding period a year ago. Quarterly after-tax earnings rose 81% to a record Rs7.8 billion against Rs4.3 billion last year.

“Gross sales are expected to rise during July-December 2013. Accordingly, the market leader and the largest company in Pakistan (in terms of turnover) sees a marked improvement in bottom line in the first half,” Janjua said.

PSO increased motor gasoline (petrol) sales by around 15% and its market share rose from 48% in July last year and stabilised at 50% on a year-to-date basis, a company official said.

In high-speed diesel, market share grew from 50% in August, peaking at 57% in November and stood at 54% on a year-to-date basis. The lubricants market also recorded significant growth, rising from 16% in July to around 25%. Furnace oil sales grew around 13% compared to last year, the official said.

Competitive edge

“We realise that our competitive edge lies in providing highest-quality petroleum products and services,” Janjua said.

The company is striving to establish itself as a brand of choice for customers, increase retail market share in all key products, maximise shareholders’ wealth with substantial growth in earnings, support the government’s energy sector reform initiatives and fulfill corporate social responsibilities.

The overarching theme of operations adopted by the company is aimed at ensuring that the products and services satisfy customer needs. “We have undertaken market development, product portfolio rationalisation, strategic partnership and business diversification initiatives,” he said.

Under the current management, a human resource development initiative for building capacity and developing leadership has been launched with the signing of a memorandum of understanding (MoU) with Suleman Dawood School of Business of Lahore University of Management Sciences (LUMS). Apart from this, an internship programme for the students of universities across Balochistan has also been started.

Relief activities

As a responsible corporate citizen, PSO has distributed relief goods among people affected and displaced by the earthquake in Balochistan in an effort to meet their nutritional and shelter needs. It dispatched a consignment containing 25,000 mineral water bottles, 1,800 ration bags, 1,000 mosquito nets and 270 tents worth Rs8 million. These items were distributed among relief camps in the vicinity of Awaran, Balochistan.

Published in The Express Tribune, January 24^th, 2014.

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