Multibillion dollar LNG project contract: MoP receives report from '4Gas' on its financial health

The Ministry of Petroleum has received a report from Dutch company'4Gas' about its financial health making things easier for the former to decide about award of multibillion dollar Pakistan Mashal LNG Project (PMLP), Business Recorder has learnt. "We have sent the report to our financial consultants, who are analysing it," sources in the ministry said.
'4Gas' has indicated that the US government agency, Overseas Private Investment Corporation (Opic), and World Bank affiliate, International Financial Corporation (IFC), have committed to provide $370 million financing for setting up a terminal at Port Qasim for LNG import. The '4Gas' management has estimated an investment of over $600 million to complete the two phases of the terminal under LNG Mashal Project.
After the analysis conducted by the financial consultant, the Petroleum Ministry will also place its report before the Economic Co-ordination Committee (ECC) of the Cabinet. "The Ministry of Petroleum may float a fresh tender for LNG import under PMLP if '4Gas' financial health is not found satisfactory," sources added.
The Petroleum Ministry is still to seek guidance again from the Law Ministry. The Petroleum Ministry had allegedly 'inadvertently' sent only one summary to the Law Ministry regarding Vitol/Fauji Foundation LNG import project proposal. "This prompted the Law Ministry to suggest that a fresh tendering for PMLP should also be held," sources said.
"If '4Gas' proves its financial health, the project may be awarded to it after seeking necessary guidance again from the Law Ministry," sources added. The ECC of the Cabinet had directed the Ministry of Petroleum to submit an evaluation report by October 6, 2010 prepared by the Ministry of Law, Justice and Parliamentary Affairs on the multibillion dollar PMLP. The report has not yet been submitted due to the delay in '4Gas' response.
According to sources, the Ministry of Petroleum is divided over the issue: one group recommends awarding the multibillion dollar contract to '4Gas' and French company 'GDF'; while the other group suggests fresh tendering of the project. Sources maintained that certain LPG groups that have recently procured the necessary license for setting up LNG terminal and indicated an interest in the project have been active in lobbying for fresh tendering by scrapping the proposed deal with '4Gas'.