Divided: CNG station owners split over LNG supply

Some want control over gas distribution, others see no role for third party

Anwer Sumra May 14, 2015
Ghayas Paracha. PHOTO: INP

LAHORE: Different associations of compressed natural gas (CNG) station owners have become divided over the issue of liquefied natural gas (LNG) supply to them.

Universal Gas Distribution Company (UGDC) and its shareholders are making efforts to win permission for the marketing and distribution of LNG while office-bearers of the All Pakistan CNG Owners Association are looking for LNG supply from Sui Northern Gas Pipelines Limited (SNGPL), The Express Tribune has learnt.

In Punjab, CNG stations have been closed for the past several months and the LNG supply dispute is prolonging their sufferings. They have lost millions of rupees due to the closure.

In March 2014, Ghiyas Paracha, the Supreme Council Chairman of the All Pakistan CNG Association, said they had planned to import LNG with their own resources and through foreign suppliers under the LNG Policy 2011 in order to distribute it to CNG stations.

UGDC was trying to get a licence from the Oil and Gas Regulatory Authority (Ogra). It requested SNGPL to allow it to ink an agreement for the marketing and distribution of LNG to CNG stations, which was rejected on May 11.

Paracha, who is the CEO of UGDC, said about 1,351 CNG station owners had agreed to buy LNG from his company. Out of the total, 800 station owners had given advance payments to make the closed stations operational. The amount paid by each of them ranged from Rs500,000 to Rs1 million depending on the demand for imported gas.

However, SNGPL has refused to allow UGDC to distribute LNG to CNG stations, which was unjustified, Paracha added.

All Pakistan CNG Owners Association office-bearer Hassan Syed said they did not want to buy LNG from any broker or third party. “We want to receive LNG from SNGPL,” he said.

Import should be made by a government enterprise (PSO) under the Public Procurement Regulatory Authority (PPRA) rules and it should be distributed via the SNGPL network to all CNG stations operating in the country, Syed added.

“SNGPL should distribute and transport the imported gas which was in the interest of the CNG sector,” he maintained.

“We were a registered company with 1,600 members, who were owners of CNG stations. The price of LNG provided by SNGPL would be lower as compared to the private broker.”

SNGPL would not allow any private organisation to market LNG without getting a licence from Ogra, which was mandatory according to Rule 4 of the Natural Gas Licensing Rules 2002, said an SNGPL official.

Published in The Express Tribune, May 15th, 2015.

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