Sui Southern Gas Company Limited (SSGC) and its foreign adviser, QED Consulting, on Thursday rejected claims made by one of the three bidders for the $200 million LNG import project, contending that its price offer was the lowest. "The sealed price offers were to be made as a single line in strict accordance with a scientific formula prescribed by SSGC in the tender documents," an SSGC official told Business Recorder.
"Three consortiums were pre-qualified by the international consultant, and one of the bidders submitted a conditional price offer that did not adhere with the terms and conditions contained in the tender documents," the sources added. According to SSGC, 11 parties purchased tender documents for the first LNG Import Project and three submitted detailed bids on February 18.
Technical parts of these bids were evaluated by QED Consulting of London, whose fees were paid by the US Agency for International Development (USAID). On March 2, the consultant pre-qualified all three consortiums. Three days later in Islamabad, the sealed price offers were opened with all bidders present.
Global Energy Infrastructure Pakistan (Private) Limited (GEIP), which is working with Conoco Phillips, offered LNG at $18.16/mmbtu, and Pakistan Gasport Limited (PGPL) which is working with Shell and ENI and which is 40 percent owned by Pakistani interests offered gas at $17.7074/mmbtu, according to official information. Elengy Terminal Pakistan Limited (ETPL), which is wholly owned by Pakistan's Engro Corporation, submitted a conditional price offer that SSGC and its international consultant view as non-compliant for not conforming to the tender requirements.
"The other two consortiums have now raised objections to Elengy Terminal's price offer," says the SSGC official. "If we use the same formula that we had asked everyone to use, the price offer by Elengy Terminal is over $18/mmbtu. The award for the first project has to go to the lowest bidder." ETPL not only says that its price offer was compliant with the tender conditions but that it is also the lowest bidder.
The SSGC official added that the matter has already been referred to lawyers in Karachi for their independent review of the matter. In its tender documents, SSGC had informed all parties that "Bidders are to bid a single price in US$ per MMBTU for P(0)."
It also told bidders that "There is no scope for adding elements to the formula set out in the draft GSA. Bidders must bid on the basis of the formula set out in the draft GSA." ETPL's price offer does not follow these instructions, the official said. Natural gas accounts for almost 50 percent of Pakistan's energy mix and the current deficit is 2 bcf. The two LNG import projects of 400mmscfd each will reduce this shortage by 40 percent. Bids for the second LNG Import Project tender are due on April 1. 2013.
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