ISLAMABAD - Ministry of Petroleum & Natural Resources has sought from the Prime Minister Muhammad Nawaz Sharif to relax ban on new recruitments for Pakistan State Oil (PSO) to finalise the liquefied natural gas (LNG) import project on fast track basis.
Earlier, the Pakistan Muslim League (N) government in June 2013 imposed a ban on ‘all recruitment in federal ministries/divisions/autonomous bodies/corporations’. The prime minister also sought from the Establishment Division to give details of all the appointments made during the last five years (constitutional tenure of outgoing PPP led coalition government).
Official sources aware of the development told The Nation that to get the experts employed for finalizing LNG import project, petroleum ministry has dispatched a summary to the premier, seeking lifting the ban in the case of PSO. They said the government has already advised the PSO to formulate a draft of agreement on LNG import deal and settle the LNG pricing and other legal issues related with import of LNG from Qatar. However, work on import of LNG from Qatar is, to some extent, stopped ostensibly due to imposition of ban on new employment in federal organizations, they added.
“PSO is in a fix how to employ seven officials including financial and legal advisors to finalize the gas import deal with Qatar because imposition of ban has so far barred the oil giant (PSO) from new recruitments,” said a senior official at petroleum ministry. He also said imposition of ban has affected the progress on LNG import project.
Officials at petroleum ministry are of the opinion that draft on LNG import agreement could not be formulated in the absence of financial and legal advisers. And, if the ban is not relaxed then Qatari LNG will not be injected in country’s gas transmission network by November this year to meet burgeoning energy needs of Pakistan.
The sources also told that LNG import issue was at the top of talks agenda during Pak-Qatar joint ministerial committee (JMC) meeting held at Doha, Qatar on February 18. A Pakistani delegation shared deliberations with Qatari counterparts regarding materialising the LNG import deal. Pakistani side also informed the meeting that Pakistan is about to fulfil the conditions of Qatar regarding setting up LNG terminal before striking a deal. And, Pakistan to ensure supply of imported LNG to meet its growing energy needs would participate in the bid if Qatar was not ready to reduce the price of LNG to be supplied to Pakistan, they added. Pakistan is eager to buy 200 million cubic feet of LNG per day (mmcfd), which will be re-gasified at the Port Qasim terminal and later injected into the system. By 2015, the volume will be increased up to 400 mmcfd. The country is interested in importing two billion cubic feet per day in the next two-and-a-half years.
When contacted, energy experts said Pakistan should ask Qatar to reduce the price of LNG. Similarly, Pakistan could save up to $7.11 billion per annum, if the rate of LNG is negotiated at par with Indian buying rate. They said India’s LNG price from Qatar between October 2012 to July 2013 has ranged between $10-12/mmbtu, and the price that did not rise to more than $11/mmbtu in 2013.
“To avoid litigation in the future, it may be wiser if Pakistan renegotiates the prices in advance, especially because base price and price index, once inked in the contract, are subject to little or no change. Moreover, there must be a price review clause in the agreement after every year,” said an expert.
It is to be noted here that during negotiations with the previous PPP-led government, Doha had offered LNG export at a price equivalent to 14.7 per cent of Brent crude oil when it was hovering around $110 per barrel in the international market. Later, it pushed the price down to $17.437 per million British thermal units (mmbtu), a 0.5 per cent discount over the previous rate of $18.002 for the 20-year lifetime of the project.