ISLAMABAD - The countdown for the EETPL to construct LNG terminal at Port Qasim has began since May 1, but Ogra is still indecisive on issuing the final construction licence.
Engro Elengy Terminal Private Limited (EETPL) and Sui Southern Gas Company (SSGC) signed a $2 billion liquefied natural gas (LNG) terminal service deal on April 30 this year.
According to the agreement, Engro has to complete the project in 11 months - starting from the date of the agreement. Failing to make the terminal operational by March 2014, Engro would have to pay $0.15 million per day, as penalty. Engro needs final approval from Ogra prior to constructing the terminal.
It was learnt that Ogra has been split into two groups over the licence issue. One group believes that the licence should not be issued to EETPL because it has not submitted complete documents and required NOCs, from defence ministry and Port Qasim Authority, as per the LNG Policy. This group consists of officers who were inducted in the authority from petroleum ministry. They are regular employees and even chairman has limited authority to take any serious action against them.
The other group, largely comprising officials who joined Ogra some years back on contract basis, is in favour of issuing the licence and believes EETPL should be facilitated as per government directions as LNG import will bring prosperity to the country. But Ogra spokesperson rejected the impression that there was any divide in the authority.
Sources said that the enmity between the groups has gone so far that permanent officers have allegedly conspired and filed cases against top management in court of law through their front-man Chaudhry Khalid advocate. It has been alleged that some officers of authority have provided Khalid with internal official documents of the authority. Those favouring issuance of licence say that the litigation is just to prolong the issue.
AR Siddiqi, lawyer of petitioner Chaudhry Khalid, denies all allegations. He said his client filed the application in public interest, and according to Article 199 of constitution any person who believes that any of his fundamental right is being violated can file a petition. He said he or his client has nothing to do with the internal politics of the authority.
Siddiqi has filed three petitions against Ogra, which are all sub-judice. One petition is against the appointment of chairman, second is against the appointment of Member gas and third is about an alleged out of turn promotion case.
EETPL, which got approval for the construction of LNG terminal, is a subsidiary of Engro Corporation Limited, a multi-billion business group of six companies. The management of EETPL does not seem happy with the delays.
Engro Vopak Terminal Limited CEO Sheikh Imranul Haque told TheNation in a text message, "Ogra issued provisional licence(s) to EETPL on July 26, 2013 and during public hearing conducted by the regularity authority on March 25, 2014. ETPL responded to all interveners, but despite all Ogra has still withheld the final licence on account of non-availability of NOC from Ministry of Defence."
He said according to LNG policy his company does not require waiting till the grant of final licence from Ogra to start construction. He said that Ogra has issued licences without certain documents in the past as well. "Precedence of earlier issued Ogra construction and operations licence exists and the licence does not require all approvals at the time of its issuance ,” he said.
Briefing about the project, he said that PQA board has approved fast track LNG project and has advised ministry of ports and shipping to expedite NOC from defence ministry. He said after the signing of agreement between EETPL and Sui Southern Gas Company the construction work of the terminal has already started.
"Pakistan is on course for setting up the first LNG import facility of the country and construction work has started following the signing of LSA on April 30, 2014", he explained, adding, "Under the LSA, Engro Corp is required to construct a jetty and HP gas pipeline to connect the jetty with SSG's national grid.
The LNG import project and construction of terminal became controversial after Petroleum State Minister Shahid Khaqan Abbasi proposed LNG import project and started ambitiously working on selecting supplier and contractor to build and run LNG terminal at Port Qasim.
This is not the first time that LNG import has been suggested. Previous government also worked on it but wrapped it up after it became controversial and court intervened. LNG project also received similar criticism when PML-N government proposed this project. The opponents raised their voice in parliament after exhausting other options and they suggested that instead of going in hurry, government should bid for supplier and contractor and only those offering lowest rates should be finalised.
But despite all criticism, not only EETPL was selected for terminal construction, on allegedly incomplete documents, but also government exerted pressure on Ogra to issue the final licence to EETPL and on SSG for LSA agreement. The LSA was signed on April 30 but final licence from Ogra is still pending.