Since last year, the current government has been making efforts to clinch the deal but to no avail as power producers are not willing to issue standby letters of credit. PHOTO: AFP
ISLAMABAD: The deadlock over a multibillion-dollar liquefied natural gas (LNG) supply deal between Pakistan and Qatar has persisted in the wake of refusal by the independent power producers (IPPs) to provide bank guarantees to ensure payments for gas purchase.
Since last year, the current government has been making efforts to clinch the deal but to no avail as power producers are not willing to issue standby letters of credit, which is a key demand of Qatargas to avoid accumulation of debt.
However, Petroleum and Natural Resources Minister Shahid Khaqan Abbasi declared in a meeting of the National Assembly Standing Committee on Petroleum and Natural Resources that an agreement would be signed with Qatar in the next six weeks.
The meeting, chaired by Chaudhry Bilal Ahmed Virk, was told that local people in Karak and Kohat districts of Khyber-Pakhtunkhwa were stealing natural gas valuing Rs10 billion a year in connivance with the provincial administration.
Read: Intense lobbying delays LNG import from Qatar
Abbasi said gas theft had been going on in the Kohat Division since 2011 and the matter was brought to the notice of K-P Chief Minister Pervaiz Khattak, but he expressed his inability to curb the practice.
“There is no writ of the provincial government in Karak, Kohat and Hangu and gas is being stolen on a massive scale,” he claimed.
Sui Northern Gas Pipelines Limited (SNGPL) Managing Director Arif Hamid told the parliamentary committee that locals in Karak had connected long pipelines with the main gas supplying pipeline. However, he added, the pipelines laid by the locals were substandard and they could cause an accident.
“SNGPL has repeatedly asked the provincial government to check gas theft, but it did not cooperate. When we cut off gas supply to the main distribution network, locals with the help of DPO (district police officer) and DCO (district coordination officer) managed to get it restored,” Hamid said.
Read: Pakistan finalises $21b LNG deal with Qatar
Government officials revealed in the meeting that the Ministry of Petroleum had revoked concessionary licences of four exploration and production companies working in the upstream oil and gas industry for failure to comply with the licensing conditions. The process of cancelling seven more licences would be completed within a week, they said.
According to the officials, the Oil and Gas Regulatory Authority (Ogra) has allowed 300,000 new gas connections per annum and gas utilities are following a set criterion.
Published in The Express Tribune, August 26th, 2015.
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