Vitol/Fauji LNG contract proposal: Prime Minister kept in dark by Ministry

The Ministry of Petroleum and Natural Resources has reportedly kept Prime Minister Yousuf Raza Gilani in the dark on Vitol/Fauji Foundation's joint proposal for 3.5 million tons LNG contract, in a desperate attempt to dump the inquiry initiated against it by Shaukat Tarin, Business Recorder has learnt.
According to the minutes of the meeting of Economic Co-ordination Committee (ECC) of the Cabinet held on March 9, chaired by the Prime Minister, the Petroleum Ministry explained that complaint of Vitol/ Fauji Foundation was based on misconception. "In fact, they came very late, and their bid was floated for the supply of LNG only for five years," the Petroleum Ministry said.
According to sources, this was inaccurate claim on two counts. First Vitol/Fauji did not bid for LNG Mashal but for another LNG project--Fauji Foundation bid for LNG terminal at Port Qasim, whereas 'Vitol' was to supply LNG--, and second, it was approved by the Price Negotiation Committee (PNC) which had determined to present it before the ECC.
"But Petroleum Ministry did not present it before the ECC in spite of being the lowest bidder which prompted former Finance Minister, who was also chairman of ECC, to initiate an inquiry," sources added. When contacted, Petroleum Minister Naveed Qamar presented a different picture: he claimed that Petroleum Ministry had received a joint proposal from Vitol/Fauji Foundation to set up a second terminal at Port Qasim for handling one million tons of LNG for five years.
"It is right that their price was aggressive but their proposal was for the second terminal," the Minister said, and claimed that the government had issued a no-objection certification (NOC) to Fauji Foundation to set up a second terminal at Port Qasim. The Minister also maintained that Vitol had not submitted a proposal to supply LNG. However, the minutes of ECC belie this claim.
Fauji Foundation Managing Director (MD) had approached Finance Minister/ ECC Chairman and alleged that their joint proposal with Vitol was not entertained despite being the lowest bidder. After receiving a complaint, Finance Minister/ ECC Chairman had directed Petroleum Ministry to clarify. Petroleum Ministry also intimated to ECC that a draft letter of Awards and Term Sheets had been forwarded both to '4 Gas' and 'GDF Suez' under LNG Mashal Project. On receipt of their clearance, Letters of Award (LoA) will be issued to both companies.