A meeting of the Economic Coordination Committee (ECC) of the Cabinet has been informed that existing LNG terminal at Port Qasim Authority (PQA), contracted on take-or-leave basis, is costing more than $ 0.5 million per day to the government, which places undue burden on the government.
This was disclosed during the meeting presided over by Finance Minister Asad Umar in a summary with regard to setting up new LNG terminal. Ministry of Maritime Affairs, sources said, contended that issue of the traffic congestion at Port Qasim owing to incoming LNG vessels was also taken up in the ECC meeting.
The meeting had decided that the main channel of PQA will not house anymore LNG terminal to ensure that PQA remains functional for other cargos. The meeting was told that although there is no scientific study for identifying a specific LNG zone, however, PQA board identified a specific LNG zone for future LNG terminals.
The Ministry of Maritime further stated that ideally, the process of setting up of an additional LNG terminal should be initiated after scientific study; however, in view of urgency Jharri Greek/Chaan Wadoo may be the most appropriate area for setting up an additional LNG terminal. The ECC was requested that PQA may be authorised to advertise for development of LNG terminal within twenty months of award of the contract.
The ECC was also informed that existing LNG terminal at PQA has been contracted on take-or-leave basis costing government more than $0.5 million per day, which places undue burden on the government. There is also need to ensure that the supply of LNG is not interrupted due to war or any other contingency and the government needs to ensure that Floating Storage Re-gasification Unit (FSRU) is not withdrawn by the owner on any pretext what so ever.
The proposals submitted to the ECC for consideration and approval included; (i) fast tracking the additional LNG terminal in the vicinity of Jharri Greek/Chann Wadoo within twenty-four months with direction to PQA and OGRA to expedite process of grant of licence; (ii) future LNG terminal would await result of the scientific undertaken by PQA; (iii) all future terminals would be contracted without any guaranteed payment by the government on BOT basis; (iv) in order to ensure security of supply of LNG, all future terminals projects to involve training of local Pakistani staff for terminal FSU/FSRU operation supply.
A press release issued after the meeting stated that the committee was informed that Port Qasim Authority is looking at various choices with a view to finding the most viable option. The ECC gave instructions to the PQA to expedite the matter and directed for completion of all formalities for setting up the new terminal expeditiously keeping in view the growing energy needs of the country.
The ECC approved proposal of Ministry of Energy based on request by Pakistan Petroleum Ltd for allocation of up to 9 mmcfd gas from Fazl X-1 field in district Matiari to M/S SSGCL.
The committee also considered and approved various proposals relating to supplementary grants. Such grants were previously approved by the Ministry of Finance, however in order to make the process more transparent, these are now considered and approved at the ECC/ cabinet level.
Comments
Comments are closed.