Ministry of Petroleum and Natural Resources (MP&NR), in total violation of the prime minister’s policy of making transparent appointments on advertisement basis, and in total disregard of the Supreme Court orders, extended the tenure of Inter State Gas System (ISGS) Managing Director by two years vide notification no 2 (8)/2012-gas dates Nov 27, 2014, The Nation learnt on Tuesday.

This is despite the very fact that all public sector companies appointments are being made through open competitive recruitment pursuant to the apex court’s orders.

Mobin Saulat was appointed as MD ISGS during the previous political regime. He has been unable to conclude the transaction of any of the gas import projects since last several years despite tall claims, particularly the TAPI project, sources said.

The TAPI gas project concession agreement may get signed by 2017 at the earliest while the imports will not start prior the 2020 even though Saulat has been painting a rosy picture to the government in respect of early gas imports, they added.

In fact, the gas demand-supply situation is likely to worsen considerably in forthcoming years since ambitious gas import dates given to the government have been falsified and are not reflective of the true duration of the process.

Mobeen Saulat has also been a key advisor to MP&NR in LNG import which is likely to start in March. “It is but sad that he misled the MP&NR wherein no agreements have been signed with LNG buyers mainly power projects to date and hence the government will be unable to sell the imported LNG to power sector, burden of which might eventually be passed on to public at large in respect of very high gas prices.”

It is noted that signing of gas supply agreements and power purchase agreements can take over six months with power producers since the same requires lengthy approval process. Earlier Economic Coordination Committee of the Cabinet had decided that imported expensive LNG will be sold to bulk consumers primarily power sector only. This situation is particularly disturbing since PSO will be setting up letter of credits exceeding $500 million in respect of import of LNG soon and is likely to go into default in absence of buyers. Hence this may all lead to a much bigger energy crisis compared to the one we are currently facing in respect of petrol shortages.