Islamabad - The stakeholders were on the same page regarding the competitive gas market in Ogra’s hearing, saying that competition in the supply of gas is a pre-requisite for better service and cheaper rates.
During a public hearing conducted by Ogra, it was noted that Energas and Tabeer Energy had applied to seek licence of sale and market of LNG. Both the applicants are also setting up LNG terminals in the private sector on their own risk.
In hearing, the regulator raised several queries regarding documents of agreements from Energas which this is seeking a licence for sale and marketing of RLNG. The regulator questioned over contracts with LNG suppliers, customers, capacity allocation, the timeframe of imports, and volume of gas. Energas officials said that it would utilise the capacity of Pakistan LNG Limited (PLL) in April. However, it also raised the question as PLL said that it would have the capacity of terminal in February and March next year.
Chief Executive Officer (CEO) Energas Anser Khan said that they were struggling for four years to get the license of sale and marketing of LNG. He said that big challenge was to seek approvals of the government. He said that PLL requires sale and marketing licence of LNG from the regulator whereas Ogra needs capacity allocation agreement. Yousuf Inam representing Pakistan LNG Limited (PLL) said that the involvement of the private sector would bring efficiency by utilising extra capacity. He said that they would issue advertisement to grant capacity in February and March so that the private sector could import LNG. He said that PLL had the un-utilized capacity for February and March. He also drew attention towards the rules that allowed the terminal operator to get the capacity of the pipeline. Member gas Oil and Gas Regulatory Authority (Ogra) Member gas also grilled the Pakistan Petroleum Limited (PLL) for causing hurdles in the allocation of capacity. Member gas said that public sector companies work under the umbrella of the Petroleum Division and they should go to the government for approval to allocate capacity. He asked PLL officials and CEO to come to Ogra along with draft rules to settle the issue.
Member Gas said that there should be competition in the supply of gas. He said that consumers would have better service and cheaper rates of gas due to competition. Rahat Kamal an intervener sought clarification regarding the allocation of capacity. He said that Energas had indicated to utilise 250 mmcfd capacity of PLL. Secondly, he said that PLL had signed an agreement with K-electric (KE) to supply 150 mmcfd. Therefore, he asked how it would be feasible. Muhammad Kashif representing PGPC said that PLL representative informed it had the capacity for February and March. Energas said it would have the capacity in April that means that PLL would not have any slot to offer to Energas in April.
In a public hearing in response to a petition filed by Tabeer Energy, a subsidiary of Mitsubishi in Pakistan. Chief Marketing Officer Shigeki Terada said they had integrated plan of LNG for the non-interrupted supply of gas to different sectors especially CNG and power. He said that it would give an option to customers and pledged to contribute to Pakistan’s economy by a materialising plan of setting up an LNG terminal and ensuring supplies. It will be 100 per cent private terminal that would reduce the financial burden on the government. He added that it would give choice to the consumers. The terminal would be FSRU based and would handle 20 cargoes per year. He said that the company is targeting to make it operational in the first quarter of 2023 and the company had MoU with world-class FSRU provider. It also signed MoU with SNGPL and had an understanding with SSGC to operate in the gas sector. In reply to a question from Ogra representatives, Jawad Majeed, General Manager for TEMPL explained that the terminal would be commissioned and be ready for first gas by 1st half of 2023. As TEMPL would be a first fully integrated terminal where LNG import, re-gasifications and sales would be handled by the company itself, there would be massive savings for the government as no off-take guarantees will be taken. RLNG would be transported to the customers using the new North-South Pipeline to be laid down by either Sui companies or ISGS in collaboration with the Russians, he explained.