Energy Ministry Contradicts News About LNG Terminals

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Energy Ministry contradicts news about LNG terminals

The Ministry of Energy on Saturday contradicted a news item appearing in a section of the press related to third party access to use LNG terminals for capacity operationalization and regasification

ISLAMABAD, (UrduPoint / Pakistan Point News - 21st Sep, 2019 ) :The Ministry of Energy on Saturday contradicted a news item appearing in a section of the press related to third party access to use LNG terminals for capacity operationalization and regasification.

According to a spokesman of Petroleum Division, Ministry of Energy, currently two LNG (liquefied natural gas) regasification terminals are operational in the country and at Terminal-1, EETPL (EngroElengy Terminal Private Limited is the operator whereas SSGCL (Sui Southern Gas Company Limited) is the customer while on Terminal-2, PGPCL (Pakistan GasPort Consortium Limited) is the operator whereas PLTL (Pakistan LNG Terminals Limited) is the customer.

The spokesman said the total peak physical capacity of Terminal-1 was 690 MMCFD (million cubic feet per day) while SSGCL had contracted regasification capacity of 630 MMCFD with a peak capacity of 690 MMCFD. Total physical capacity of Terminal-2 was 750 MMCFD out of which PLTL had a contractual capacity of 600 MMCFD with a peak capacity of 690 MMCFD, he added.

He said there was uncontracted regasification capacity available at PGPCL LNG Terminal for which the private sector was negotiating with PLTL for access to the available capacity.

He said,"The contract expressly provides for third party access and PGPCL is not obligated to sell such excess capacity to PLTL. The capacity that will be offered to private sector will be over and above the capacity contracted by the government.

This process is in accordance with the ECC's decision dated 31st July, 2019 which was arrived at after consultation with the Law Division and other stakeholders." Regarding the procurement of Additional Available Regasification capacity of the LNG Terminal, it was decided by the ECC that LNG terminal operators may allocate their additional regasification capacity of terminals to third parties on purely commercial basis, but always subject to priority of PLTL on berthing, storage and regasification for its contracted capacity.

Regarding the perception that the government is selling its own contracted capacity, the spokesman clarified that the ECC in its said decision stated that "if GoP (Government of Pakistan) is not fully utilizing its contracted capacity of 600 MMCFD at any time, any sale to private company will first reduce the take or pay obligation of the GoP for the unused capacity.

"The sale of GoP capacity can only be undertaken through a competitive bidding process in a transparent manner in accordance with PPRA rules and cannot be sold to a single party (operator)," he added.

He said as an alternate, PLTL as capacity holder could allocate the idle capacity through competitive bidding for the benefit of government and to reduce the financial burden on government in terms of capacity payments.

The spokesman said all the processes and procedures undertaken in the exercise involved extensive stakeholder consultations especially with OGRA for devising a fair and transparent Third Party Access procedure and mechanism for terminals and transmission pipelines.

He said the Petroleum Division was fully cognizant of and committed to implementing its mandate of ensuring transparent, efficient transportation of energy in an effective manner for sustainable socio-economic development of Pakistan.

He said,"This decision does not dilute any rights of the government and in fact provide a mechanism for the take or pay of the government to be reduced, while keeping the priority of storage and use with the government all the time."

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