ISLAMABAD: Senate Standing Committee on petroleum was informed on Wednesday that the feasibility was being prepared to set up gas storage facility worth $1.5 billion for 20 days in Badin.
The committee which met with Muhammad Abdul Qadir in the chair discussed spot purchasing of Liquefied natural gas (LNG) by the Pakistan LNG Limited (PLL) and Pakistan State Oil (PSO), Liquefied Petroleum Gas (LPG) cylinder blast at Gujranwala, drilling for oil and gas exploration, corruption/default case of M/s Hascol Petroleum Limited.
Briefing the committee, the Petroleum Division secretary informed that currently there was no gas storage capacity adding that 12 cargoes of LNG worth approximately Rs5 billion were purchased in a month.
Out of the total, seven cargoes were being purchased under the long term from Qatar and five cargoes on spot, he added.
He said currently there was no gas storage facility in the country and 20-day gas storage facility was the sole solution to get cheap LNG.
He said there was two LNG terminals owned by Engro Company and Pakistan Gasport Consortium Limited (PGPC). The daily charges of Engro terminal was $ 242, 000 and $ 265, 000 of PGPC terminal.
He said two more terminals were in pipeline and nearer to achieve financial close. He said cargoes were purchased as per annual delivery plan. However, he said the plan was repeatedly changed for almost eight times as per demand.
He said they were bound to follow Public Procurement Regulatory Authority (PPRA) rules for spot purchase. PPRA was told that its rules did not suit LNG purchase, he said. PPRA board was asked that condition of 15 days would be not applicable on LNG spot purchase. He said it would also be presented to federal cabinet in form of legislation.
He said they could not give guarantees in April to purchase LNG for September. The law was being changed for sport LNG purchase till December, he added
The secretary said Sui Gas Company had Rs 400 billion debt while PSO Rs150 billion debt.
The Oil and Gas Regulatory Authority (OGRA) chairman told the House that the authority was going for liberalization of the gas market and licenses were issued to six-seven new companies. These companies would purchase gas and then would sell onward, he added.
He said Hascol had an important strategic storage. State Bank of Pakistan and Securities and Exchange Commission of Pakistan did not approach the authority for any financial irregularities, he said.
Senator Fida Muhammad said names of those people involved in the financial irregularities should be put in exit control list.
Senator Mohsin Aziz said the company was involved in Rs66 billion financial embezzlement.
The meeting was attended by Senators Fida Muhammad, Mohsin Aziz, Aon Abbas, Prince Ahmed Omer, Sarfaraz Ahmed Bugti, Rukhsana Zuberi, Saadi Abbasi, Afnan Ullah Khan and Atta ur Rehman, PSO managing director, OGRA chairman and other senior officials of departments concerned.