OGRA goes out of its way to issue natural gas sale license to private firm


Without conducting a public hearing and seeking comments from the stakeholders, the Oil and Gas Regulatory Authority (OGRA) has granted the license to a private firm for the sale of natural gas to the end consumers, CNG stations located in Sindh province.
A copy of OGRA’s decision available with this scribe disclosed that regulatory authority (OGRA) has issued a license to Gaseous Distribution Company (Pvt) Limited, (formerly Pak Gas Distribution Company Pvt Limited) to carry out the regulated activity related to sale of the natural gas to the end consumers, CNG (compressed natural gas) stations located in Sindh province. And, the license will remain effective for a period of 10 years from December 22, 2016.

However, the license shall be effective subject to the fulfillment of conditions of the license document. OGRA chairperson Uzma Adil, Noorul Haq, Member (Finance) and Aamir Naseem, Member (Gas) has signed the license document of Gaseous Distribution Company (Pvt) Limited.
Sources aware of the development told that the OGRA has issued the license to Gaseous Distribution Company Limited in violation of the OGRA rules. They said the OGRA, surprisingly, did not convene a public hearing in the name of Gaseous Distribution Company Limited to seek comments/opinions from the general public and the concerned stakeholders.

“Chairperson OGRA Uzma Adil, and Member (Gas) Aamir Naseem have played a role in the issuance of license to Gaseous Distribution Company Limited, while Member (Finance) raised reservations on it,” the sources said.
Sources also said that Chairperson Uzma Adil has instructed the OGRA staff to urgently complete the requirements of issuing a license to the private company, and the staff, along with chairperson, completed the requirements by working hard for two days even at night till 11pm.
They said Uzma Adil and staff remained at night to get the job done. They said although it is mandatory for Gaseous Distribution Company Limited to obtain a letter of consent from SSGCL for using the transmission and distribution network of the SSGCL, yet no letter was obtained from SSGCL by the Gaseous Distribution Company Limited.
Interestingly, the OGRA has issued the license silently and handed it over to the Gaseous Distribution Company Limited in no time period. But, it (OGRA) has still not uploaded the license on its official website and set aside the transparency mechanism, the sources said.
It is also learnt that issuance of the license to the company to undertake the sale of natural gas to the consumers has caused panic among the officials of regulatory authority.

The officials are worried and feared that National accountability Bureau (NAB) might make them part of an investigation on finding a violation of rules in the issuance of such an important license to a private gas
company. Besides, the monopoly of Sui Southern Gas Company Limited (SSGCL) to undertake regulated activity related to the sale of natural gas to the end consumers in Sindh province has ended following the
issuance of a license to Gaseous Distribution Company Limited by OGRA, the sources said.
According to OGRA’s decision on the license, by utilising the existing pipeline infrastructure of SSGCL, Gaseous Distribution Company Limited would be able to sell the natural gas to the consumers.

The company will purchase LNG (Liquefied natural gas) which will be re-gasified at terminal before they inject it into the pipeline network of SSGCL, the license said.
The OGRA’s decision also revealed that earlier Pak Gas Distribution Company Private Limited had applied for the grant of a license for the sale of the natural gas to the consumers of Sindh province, on which the OGRA convened a general public hearing in Karachi on December 14, 2016.
During the proceedings, Pakistan State Oil (PSO) raised objections and contended to the name of “Pak Gas” as it is the brand name of PSO since 1982 with regard to PSO’s business of gas (LPG & CNG) wing. The PSO objected that the OGRA is not authorised to issue a license in the name of Pak Gas which is a well-known brand of the PSO.
Similarly, Director Pak Gas Sameer Gulzar also pointed out that a false and fake board resolution, unauthorised transaction structure, fake and dubious corporate record, fraudulent declaration of senior
management, unclear and dubious supply arrangements, non-availability of degasification capacity, absence of transportation arrangements and no allocation by MP&NR were submitted to the OGRA for the issuance of the license.
The OGRA has refused to issue the license in the name of Pak Gas due to the opposition of PSO and the director Pak Gas, said the official documents.  It is worth mentioning here that CNG stations of Sindh would remain open in all seasons whether winter or summer under the new gas distribution plan of the OGRA for Sindh and Karachi.

They said the Gaseous Distribution Company (Pvt.) Limited will purchase imported gas (LNG) from Pakistan State Oil (PSO) under third party access rules, 2012, and will process it at the terminal. After the processing, RLNG will be supplied to the consumers of Sindh by Gaseous Distribution Company Private Limited.


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