The government has suffered a loss of more than Rs 25 billion due to the failure of state-owned Pakistan LNG Limited (PLL) to make timely arrangements for the importation of the goods, the merchandise said on Wednesday. Public Accounts Committee (PAC).
In recent months, the PLL had canceled cargoes and then allocated them to LNG traders after a few days at higher tariffs.
The PAC meeting, held under the chairmanship of Rana Tanveer Hussain in Parliament, was further informed that the PLL had failed to organize LNG imports when prices were lower in the market.
However, he imported the product at a record price, imposing a multi-million dollar burden on consumers.
The PLL is also said to have awarded several LNG contracts to a foreign company, which has given rise to controversy. Now the National Accountability Bureau (NAB) is investigating the matter.
PAC was further informed that there was an agreement with the fertilizer factories to supply gas at lower tariffs. However, fertilizer factories did not pass on its benefits to consumers.
Petroleum Secretary Dr Arshad Mahmood informed the panel that under the new agreement Pakistan will import LNG from Qatar from November to December.
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“The gas can be stored for 20 days,” he said, adding that the main reason for buying expensive LNG was the lack of storage capacity in the country.
The secretary added that Pakistan needed 12 shipments of LNG per month.
“The cost of a cargo of LNG varies from Rs5 to Rs7 billion.”
At a meeting of the Standing Senate Petroleum Committee chaired by Senator Mirza Abdul Qadir, Oil and Gas Regulatory Authority (Ogra) Chairman Masroor Khan said state-owned gas companies maintained that their customers would look to other parties if the private sector were allowed to import LNG.
However, he added that the business issues were now resolved and the private sector would start importing LNG within the next two months.
The oil division told the Senate committee that the gas sector was facing a loss of Rs35 billion in winter.
He added that the PLL was also facing financial difficulties.
The petroleum secretary said a forum should be formed with the authority to approve an annual LNG delivery plan.
The Senate panel was told that Qatar’s long-term deal was around $ 10 per mmbtu.
Pakistan GasPort Consortium Limited (PGPC) terminal is operating at low capacity for some reasons. The daily rent for the LNG terminal is $ 242,000.
The LNG terminal wants to sell LNG directly to consumers, while gas companies believe that if large sectors pull out of using imported RLNG, their system will not work.
A feasibility study is underway to build LNG storage facilities in Sindh at a cost of around $ 1 billion. The petroleum secretary said the loss of gas in winter is worth Rs35 billion. The Public Procurement Regulatory Authority (PPRA) has been informed that its law is unsuitable for LNG.
Regarding the purchase of LNG, the PPRA granted a derogation in the rules. The chairman of the committee said the federal government should look ahead to the LNG market.
The senior general manager of Sui Northern Gas Pipelines Limited responded that the LNG orders were timely.
However, the system has been affected by the ups and downs in the orders of various companies.
The chairman of Ogra said that Hascol Petroleum Limited had significant strategic storage but that the Securities and Exchange Commission of Pakistan (SECP) and the state bank had not been contacted about the “financial irregularities” of the company.