ISLAMABAD - A parliamentary committee on Thursday sought record of the contract of LNG, being imported from Qatar, and bidding for setting up of two LNG terminals.

The members of the Senate standing committee on petroleum, which met here under the chair of Senator Mohsin Aziz, was informed that for the investment of $150 million, for LNG terminal, the consumers had paid Rs 35.7 billion to Engro Terminal over the past three years.

While briefing the committee on the issue of LNG terminal, managing director of the Sui Southern Gas Company Amin Rajput said that SSGCL was not part of the bidding process conducted by Interstate Gas Company (ISGC) in which Engro was selected for setting up of the terminal. However, the contract was signed by SSGCL, Pakistan State Oil and Engro with the approval of the federal government.

Sheikh Imran-ul-Haq, managing director of PSO, informed the committee that price with Qatar Gas for a 15-year LNG supply contract was finalised by a price negotiation committee (PNC) comprising a number of federal secretaries. The LNG price was finalised at 13.37 percent of Brent on a G to G basis without bidding process, he added. He said the price with Qatar was earlier finalised at 13.7pc of Brent but later brought down when it agreed to match price quoted for a similar supply contract with Gunvor through sport tender.

Managing director of ISGC Mobin Solat said the company was ordered by the government to process international bidding for LNG terminal and bids were evaluated by an international consultant. On finalisation of bidding process, SSGCL board approved it and contract was signed with Engro for LNG terminal. The bidding was transparent in line with procurement rules and the contracts were provided to National Accountability Bureau and Procurement Regulatory Authority, he added.

Rejecting the allegation of under utilisation of Engro Terminal, Adnan Gilani of Pakistan LNG said the Engro terminal never remained under utilised since March 2015 but terminal of Pakistan Gasport established since January 2018 remained under utilised by 50-60 percent because of lower demand by the power sector. He said that as compared to furnace oil the LNG was economical and the country was estimated to have saved $2 billion by switching from furnace oil to LNG.

Chairman of the committee questioned why no capping or ceiling the LNG price was ensured in the contracts that was finalised when crude prices were at the lowest and going up since then. Senator Mohsin Aziz said it was a major flaw like capacity payments that were flowing down to the consumers because of unprofessional or questionable role of the officials.

The committee ordered that minutes of the price negotiation committee, proceedings of bidding for terminal and contracts for LNG supply and contracts be produced in the next meeting to be held in camera on the request of petroleum division.

Meanwhile, Secretary Petroleum Division Sikandar Sultan Raja complained that most of the foreign petroleum exploration and development companies have left Pakistan except one because of dozens of NOCs stuck up with the defence authorities. Secretary said that 30-40 exploration blocks were lying idle for long because of non-issuance of no-objection certificates (NOCs). Mainly because of this reason, he said the authorities have not been able to offer any worthwhile block for exploration licences over the past few years.

Secretary petroleum told the committee that billions of rupees worth of funds collected from oil and gas firms under corporate social responsibility (CSR) have been transferred to the provincial and district administrations for development works.

However, he complained that these funds remained stuck up with deputy commissioners and assistant commissioners. He said they had asked the provincial governments for the utilisation of funds through committees comprising local members of the National Assembly but outcome was not encouraging.

The meeting was informed that the current LNG requirement stands at 1000 MMCFD which is projected to reach 3600 MMCFD by 2030. The current energy requirements of 79.58 million tonnes of oil equivalent (MTOE) were being met through 38 percent gas, 34 percent oil, 6 percent LNG and other resources including LPG, hydro and coal resources. The meeting was informed that around 0.5 million consumers were being added annually to the existing number of 8.8 million of gas consumers in the country.