ISLAMABAD: The Special Investment Facilitation Council (SIFC) has directed Jamshoro Joint Venture Limited (JJVL) and Sui Southern Gas Company Limited (SSGCL) to reach an agreement by January 15, 2025 for restart of gas supply to JJVL.
The directive came during the eleventh meeting of the SIFC Executive Committee (EC), chaired by the Federal Minister for Planning, Development & Special Initiatives. The meeting reviewed progress on projects across petroleum, minerals, power, aviation, and other investment-related sectors.
According to sources, the SIFC emphasized resolving the JJVL matter to avoid further financial losses. It was decided that both parties must finalize a mutually agreeable percentage-sharing formula, approved by the SSGC Board, by the specified January deadline. Gas supply to the JJVL plant will resume immediately upon signing the agreement.
Additionally, the EC highlighted that the agreement should adhere to the Revenue Sharing Formula already endorsed by the Supreme Court of Pakistan. It instructed the Federal Investigation Agency (FIA) to prioritize concluding its inquiry into JJVL-related matters and to submit a progress report by January 31, 2025.
To address financial concerns, the SIFC mandated that all undisputed dues payable by JJVL to SSGC be cleared, with a report on the progress submitted by January 20, 2025. The petroleum division has maintained that any gas supply resumption should be contingent upon settling old outstanding dues, emphasizing the importance of a commercially beneficial agreement for both parties.
The EC observed that the ongoing closure of the JJVL plant has resulted in an estimated annual foreign exchange loss of $108 million. The idle plant remains ready for production but has been non-operational due to the disconnected gas supply. The council expressed urgency in resolving the issue, given its significant impact on the country’s economy.
Previously, the SIFC had instructed the petroleum division to mediate an agreement between SSGCL and JJVL, but the matter remained unresolved despite multiple meetings. The EC reiterated the importance of addressing all pending issues and finalizing an agreement to ensure the swift resumption of operations at the JJVL plant.
According to industry sources, once JJVL’s LPG extraction plants comes on stream, it will start catering to the energy needs of over 750,000 homes across Pakistan. And this will also help contain the increasing LPG prices that have surged a lot mainly because of huge deficit of piped gas (local gas and RLNG) in the country. They said that the JJVL-LPG extraction plant has the capacity to produce 300-500 tons of LPG that accounts for 15 percent of total LPG supply in the country, and it is not operational since June 21, 2020 due to which the national kitty has suffering billion per annum. They said the LPG production by JJVL is enough to cater to energy needs of over 750,000 homes across Pakistan,” said sources, and added that with the closure of JJVL, almost 5,000 people had lost their jobs too. The Sui Southern had stopped gas supply to JJVL and canceled its deal with the extraction plant on June 21, 2020 arguing that its agreement with JJVL was for a period of 18 months, which expired automatically after the Supreme Court of Pakistan verdict on December 4, 2018, said sources.
It is pertinent to mention that the revival of JJVL is seen as a critical step toward boosting the country’s energy production and foreign exchange savings. This initiative is expected to reinstate the plant’s production of liquefied petroleum gas (LPG) and natural gas liquids (NGL). With the SIFC’s intervention and clear deadlines, both parties are expected to resolve their differences and work towards restarting the plant by early 2025.
