Mystery shrouds first LNG shipment

Gas import agreement yet to be finalised with Qatar.

ISLAMABAD:

The Ministry of Petroleum and Natural Resources, a vital arm of the government especially in these times when oil and gas shortage is a continuous drag on the country’s economy, has fared poorly as it has failed to ensure energy supply to consumers.

Though the PML-N administration has been active in addressing the problem of energy scarcity and has started liquefied natural gas (LNG) import for the first time to ease the shortage, especially in Punjab, the petroleum ministry has been unable to live up to its gas import commitment. It brought only one shipment and that too through private sector and spot purchases.

However, the consignment came in a mysterious way. No one knew who imported the gas, which was injected into the pipeline network without any proper transmission system in place.

The third-party rules framed by the previous government of Pakistan Peoples Party to allow gas utilities to charge tolling fee on gas transmission have been suspended. What mechanism was established to supply gas through the pipeline system, nobody knew.

There are also many unanswered questions about the LNG supply arrangement with Qatar, which has not been finalised yet. Reports suggest Punjab Chief Minister Shahbaz Sharif has played a key role in negotiations with Doha over LNG imports worth billions of dollars and getting close to an agreement.

A former chief of the National Accountability Bureau (NAB), who was very close to the kingdom in Qatar, was also instrumental in deliberations over LNG import.

Though Elengy Terminal Pakistan Limited has set up an LNG terminal for handling supplies, the promised imports from Qatar have not yet begun.

So far, only the private sector has brought LNG after spot purchases. But it was not provided to the sectors whose money was used for import.

According to industry players, compressed natural gas (CNG) station owners and fertiliser producers had provided money for LNG purchase, but the gas went to Kot Addu Power Company (Kapco). They fear that in future too, they will get nothing because of the monopoly of gas distribution companies.

Petroleum and Natural Resources Minister Shahid Khaqan Abbasi had promised to inject LNG into the pipeline network before March 31. Though it was released into the pipeline, but it was unclear that supplies would remain smooth and uninterrupted.

Regulator sitting idle

The Oil and Gas Regulatory Authority (Ogra) has been virtually sitting idle after its chairman Saeed Khan was sent on forced leave. The government also suspended petroleum secretary Abid Saeed accusing him of failure to foresee and ward off acute petrol shortages in Punjab in early January.

Additional petroleum secretary Naeem Malik, who had been dealing with policy matters, was also suspended. The petrol crisis proved to be a blessing in disguise for a certain lobby in the petroleum ministry, which got control over important matters after suspension of the two senior and competent officials.

Now, the ministry is being run by acting secretary Arshad Mirza, the career of whom was not without controversies, as he has the backing of a powerful official in the Prime Minister’s Secretariat.

Mirza got two negative performance reports – one each from the Ministry of Finance and the Ministry of Water and Power – allegedly due to misconduct. Now, he is running the petroleum ministry, which is engaging in multibillion-dollar LNG imports from Qatar.

In a report submitted to the Economic Coordination Committee (ECC) of the cabinet, Mirza claimed they had brought efficiency and good governance in affairs of the energy sector despite the fact that Oil and Gas Development Company (OGDC) had no managing director and Pakistan State Oil (PSO) was being run under an ad hoc arrangement.

PSO has no permanent head and is being run by Shahid Islam, the head of Government Holdings Private Limited (GHPL). It is also a major stakeholder in bringing LNG shipments to the country. How LNG supplies are handled in future and provided to energy-starved industries remains a big question mark.

The writer is a staff correspondent

Published in The Express Tribune, April 13^th,  2015.

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