Oil, gas E&P firms allowed to sell 35pc of gas to third party instead of Sui companies

CCI has allowed several amendments for enhancing exploration activities in country

ISLAMABAD  -   The caretaker government has allowed the oil and gas exploration and production (E&P) companies to sell 35 percent of their gas to third party instead of state owned Sui companies.

The Council of Common Interest (CCI) had Monday also approved the Tight Gas 2024 policy. The forum, which met under the Caretaker Prime Minister Anwar-ul-Haq, approved two summaries for Amendments in Petroleum Policy 2012. The CCI has allowed several amendments for enhancing exploration activities in the country. It was approved that provision of another opportunity to E&P Companies is to opt for the Policy 2012. Similarly Zone-I(F) price incentives will be offered to existing licenses and D&P leases for new exploration efforts. Effective date for conversion shall be date of notification after approval by the CCI.

For re-grant of lease till the end of economic life of the field, provided that beyond 30 years, the lease holders agreed to pay 15% additional wellhead value. The amount collected will be equally divided between the federal government and provincial government concerned. Provision of right to E&P companies to sale up to 35% of their share of pipeline specification gas to third party having OGRA license, through competitive process, without approval of the government or any of its entity, provided that the price(s) charged from third parties would not be less than the wellhead gas prices under Petroleum Policy 2012 for the respective zones. After this amendment, the E&P companies are allowed to sell 35 percent of its gas to other buyers instead of the SNGPL and SSGC.

This provision will also apply to all existing licenses/leases granted under Petroleum (E&P) Rules 1986, 2001, 2009 and 2013 for the gas discoveries which are not yet allocated and will be allocated after date of notification pursuant to CCI approval. The CCI also approved Tight Gas Policy 2024. It has been approved that in order to exploit Tight Gas Reserves, the applicable price for Tight Gas as defined in this Policy, shall be 40% premium on the respective zonal price of Petroleum (Exploration and Production) Policy 2012.

The above Tight Gas price incentive will be applicable from the date of the notification of this Policy to all Tight Gas discoveries under the existing and/or future exploration licenses, Petroleum Concessions Agreements (PCAs), Mining Leases and Development and Production (D&P) leases that satisfy qualification of Tight Gas under Section 4 of this Policy and are accepted as Tight Gas following the process set forth herein.

OGRA/any authority as may be notified by the federal government shall notify provisional incentive price without EWT discount once the Initial Third- Party Certification confirms the discovery as Tight Gas discovery. Any pending execution of a formal supplemental agreement shall have no bearing on notification of this provisional price. In this regard the Regulator/ Authority shall issue appropriate policy guidelines to the PDA/OGRA. Notwithstanding the above, the incentives of this Policy shall be applicable on projects that have been certified within ten (10) years w.e.f. the notification of this Policy.

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