SSGC seeks sovereign guarantees for installing LPG air-plants

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Islamabad:  According to sources, Sui Southern Gas Company (SSGC) is seeking the federal governments help to offer sovereign guarantees worth for billions of rupees of bank loans for the establishment of 30 liquefied petroleum gas (LPG) air-plants in various areas of Balochistan and Sindh.

In a meeting of Economic Coordination Committee (ECC) in October last year, the approval was granted for the installation of 60 LPG air-plants, with half of them to be setup by SSGC in remote areas of Sindh and Balochistan, while the rest by SNGPL.

SSGC will be installing most of the LPG air-plants in Balochistan and two in the remote areas of Mithi and Umerkot in Sindh.

The Ministry of Petroleum has urged the government for providing funds to SSGC for this project and the company wants to obtain loans on soft-terms backed-up by sovereign guarantees.

Petroleum ministry then approached the finance ministry to assist in getting a soft-term commercial loan of Rs10b alongside sovereign guarantees for a period of ten years at a reasonable interest rate.

The cost of installing these LPG air-plants has been estimated at Rs14b and SSGC already is on verge of completing the second LNG pipeline whose costs it met with Rs18b of its own equity and the balance of Rs40b was raised from sovereign guarantees provided by the federal government.