MD ISGS becomes approver in LNG procurement and terminal scandal

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ISLAMABAD: Inter State Gas System (ISGS) Managing Director Mobin Saulat has become an approver in the investigation of National Accountability Bureau (NAB) initiated against former prime minister Shahid Khaqqan Abbasi in Liquefied Natural Gas (LNG) terminal scandal, it was learnt on Sunday.

In his four page statement submitted with NAB, MD Saulat, who had played an important role in the construction of LNG terminal and LNG purchase from Qatar, has blamed former PM Shahid Khaqqan Abbasi, Miftah Ismail, and ex-MD Government Holding Private Limited (GHPL) Shahid Islam for all wrong doings. His statement said, in July 2013 he was directed by the then Minister for Petroleum Shahid Khaqqan Abbasi to coordinate LNG related activities in addition to his existing duties in ISGS.

Separating himself from the blame of terminal site suitability, Saulat said that though FOTCO had written a letter expressing concern on the LNG terminal site to the prime minister, yet the then Minister for Petroleum Abbasi himself responded the letter and gave justification which can be obtained from the petroleum ministry’s record. He said that as a professional accountant having financial/commercial experience, it was not possible for him to ascertain the pros and cons of establishing LNG terminal at the site of Engro’s Chemical Terminal so the decision was very much attributed to SSGC’s technical team comprising of Zohair Siddiqi, Rahat Kamal etc. as well as board members with engineering background input.

Saulat, in his statement submitted to NAB, also made Miftah Ismail, being Chairman Board of Directors of Sui Southern Gas Company (SSGC), responsible for single handedly tackling the initial LNG cargos arrangement between PSO and SSGC.

A copy of Saulat’s statement available with Pakistan Today discloses that under the Government to Government agreement between Qatar and Pakistan, PSO was the designated entity to negotiate and execute LNG Sales Purchase Agreement (SPA) with the designated entity from the Qatari side. However, Saulat was directed by the minister Shahid Khaqqan Abbasi to attend some of the negotiation sessions pertaining to the Heads of Terms of the Agreement to assist the PSO team along with their consultant.

Saulat further said that the whole negotiation round was spearheaded by Shahid Islam who was the acting MD of PSO. He said though the PNC (price negotiation committee) chairman was Secretary Petroleum Arshad Mirza but the price negotiation was mostly spearheaded by Miftah Ismail who is also the member of PNC. He (Miftah Ismail) was also liaising with the minister regarding the progress of the negotiation and passing instructions to the other PNC members for the way forward. Shahid Islam (acting MD PSO) was the authorized person to exchange sealed price proposals from Qatar Gas to the Price Negotiation Committee, said Mobin Saulat.

“As mentioned earlier, since I have an Accountant qualification and finance experience, my input was limited to providing assistance only to financial terms of the agreement. PSO had deputed team comprising of technical/legal/procurement/contract experts (Babar Chaudhry) etc who have negotiated and finalized the entire Heads of terms and full SPA and got it approved from their Management/Board,” read MD ISGS’s statement.

He also said that the Board of ISGS was headed by Secretary Petroleum and comprising of other members (additional Secretary Petroleum, Joint Secretary Petroelum, MD SSGC, MD SNGPL, Chief Secretary Balochistan, Shahzad Ali Khan Zubair Motiwala) had authorized him to float the tender on behalf of SSGC. The same was also approved by SSGC Board.

Likewise, Mobin Saulat said that SSGC was the procuring agency for the project and ISGS was mandated to coordinate the LNG terminal project. SSGC was a part of the tender process from day one till the award of the LNG terminal project and no step could be taken without SSGC approval; in addition, the managing directors of both SSGC and SNGPL BoD approved the project at every stage of development.

The financial bid of the successful bidders was explicitly approved by SSGC board headed by Miftah Ismail with the direction to the management to negotiate the LNG Service Agreement (LSA). Accordingly, the whole procurement process was completed by SSGC and LSA was executed. Miftah Ismail also as Chairman Board single handedly tackled the initial LNG cargos arrangement between PSO and SSGC, said Mobin Saulat.

Sharing details of LNG terminal agreement, Mobin Saulat said that the transportation agreement namely TA1 and TA2 were negotiated and finalized between the terminal operator and PSO and SSGC/SNGPL respectively. ISGS was not party to any of these agreements nor had played any role in it. “It is pertinent to mention that in order to establish the reasonability of the price insisted by the Qatari side during negotiation, I proposed to do the market testing through an independent tender process. This had resulted in getting a price significantly lower than the Qatari’s last stated position and hence saved millions of dollars,” said Saulat.

It is relevant to mention here that Saulat was given the acting charge of GHPL on September 28, 2017 and was withdrawn on September 12, 2018. According to his statement, at the time when he was given the acting charge, there was already an ECC approval for the setting up of GHPL subsidiaries namely M/s PLL and M/s PLTL to carry out LNG regasification and LNG procurement business. Moreover, the Board headed by Secretary Petroleum had already committed provision of the working capital and SBLC for their operations.

The previous management headed by Shahid Islam had also already given funds to these subsidiaries as an advance but with no formal loan agreement in place. “I ensured execution of an agreement with commercial terms duly approved by the respective Board to safeguard GHPL’s interest”, said Saulat in the statement.

Sources in NAB said that Mobin Saulat has become an approver against ex-premier Shahaid Khaqqan Abbasi. However, since NAB has enough proofs and evidence against the former PM Abbasi so name of Mobin Saulat can be included in the list of accused.

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