Gas allocation for new LNG terminals opposed

The Petroleum Division has opposed a proposal regarding the allocation of the existing capacity in gas pipeline to the upcoming two new liquefied natural gas (LNG) terminals at Port Qasim, Karachi, saying that they should “come online first”.

The development came during a meeting of the Cabinet Committee on Energy (CCoE) wherein officials of the Petroleum Division said that the new terminals should “come online first as they are only on paper and no construction work has yet been initiated.”

According to the Petroleum Division, the suggestion was against third party access rules that allow private parties to market gas through a competitive process. “It will create a monopoly of upcoming LNG terminals planned by Energas Terminal Pvt Ltd and Tabeer Energy Pvt Ltd and deprive others,” they said, adding that three other parties like Pakistan Gas Port Ltd, Engro, and Global Energy were also working on setting up terminals whereas the capacity in the gas pipeline should be allocated on the first-come-first-served basis.

Following the division’s reservations, the CCoE formed a committee comprising Minister for Maritime Affairs Ali Zaidi, Petroleum Minister Omar Ayub, Special Assistant to Prime Minister on Petroleum Nadeem Babar and Special Assistant to PM on Power Tabish Gohar.

It may be noted here that any capacity, whether “unutilised” or “excess”, is offered to private parties only on a short-term three-month forward visibility basis, after approval from all relevant stakeholders based on the Cabinet’s Economic Coordination Committee’s (ECC) decision.

Moreover, the ministry requested directing the gas transmission companies to share the draft Gas Transmission Agreement with both the new LNG terminal developers, which may be finalised before the grant of transmission/transportation licence by Ogra.

“OGRA may be directed to expedite the issuance of all relevant licences after fulfilling all codal formalities.”

Monitoring Desk
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