The Supreme Court has allowed the Petroleum Ministry to sign deal with a firm GDF for supply of liquefied natural gas (LNG), for which offer is valid till April 15. Addressing a press conference, Petroleum and Natural Resources Minister Naveed Qamar said that Pakistan would have the benefit of $1.33 billion after striking a deal with GDF over Vitol proposal.
He said that the National Assembly standing committee on petroleum and natural resources had cleared the deal and calculated $1.33 billion benefit. The Minister said that companies were annoyed over Pakistan for disclosing the pricing formulas as this practice is prohibited in the world market.
"The Parliamentary committee has clearly established that reports about LNG scam were totally baseless," he said, adding that the deal with GDF, as compared to Vitol/Fauji Foundation, was better. He said that LNG Mashal Project was for LNG supply of 3.5 million tons per year.
The report of parliamentary committee shows that after hearing the views of the Managing Director of Fauji Foundation, who was referred as the main complainant in the press report, the committee was of the view that the bid of Fauji/VITOL was not ''lowest'', but ''competitive''.
It was further observed that Fauji''s main reason for calling the Minister for Finance/Chairman of ECC was to inquire as to why their bid was not considered/discussed by the ECC. It was also clarified by MD of Fauji Foundation that the bid, being referred to, was against the short-term LNG supply by SSGC in July, 2009 and they never claimed that their bid was the lowest; rather it was competitive. He stated before the committee that he did not know whether it was lowest or not because he did not know the figures given by the other bidders.
The former Minister for Finance, explaining his position, said that in response to a call from MD Fauji Foundation, he just inquired into the issue in writing. He further said that being the Chairman of ECC, it was his responsibility to ensure that the process was transparent and no concealment of facts was made. He also asked the Ministry for Petroleum to respond to the issue in the next ECC meeting.
He also confirmed having telephonic conversation with the correspondent of a local daily on the issue and he said it before the committee that he did not give the figure of $1 billion as he did not have any information which could be used as the basis for the calculation.
The Ministry of Petroleum, while responding to the issue in question, explained in detail that the summary taken to the ECC was for the Mashal LNG Project for which the tendering process was initiated in 2006. Based on the current prices the GDF offer was substantially lower than the VITOL offer. It was also informed that as per consultants report, LNG prices were expected to remain stable compared to the Brent crude oil prices.
The requirement of Mashal was 3.5 million tons per annum which is equivalent to 500 mmcfd for 20 years whereas Fauji''s offer was of 2 million tons per annum, a package offer (terminal plus supply). The Ministry said that it had already finalised the deal with ''4 Gas'' for providing the terminal they only required and advertised for supply of LNG. The Minister also said that it was not common practice to lay the details of proposals, which were not successful, before the ECC for approval.
After hearing the views of the newspaper correspondent, the committee was of the opinion that the news report was not based on substantial documentary evidence and was merely based on the summary and minutes of the ECC. The summary was also misread when the correspondent made the statement before the committee. The correspondent mentioned telephonic conversation, some of the contents of which were contradicted by Shaukat Tarin.
After hearing the viewpoints of all the above mentioned persons/parties, and examining the record given by the Ministry and the correspondent, the committee concluded that the allegations levelled against the Ministry of Petroleum and Natural Resources were not based on facts. The committee was of the view that such projects were of national importance and casting aspersions on them without any evidence not only jeopardises the transaction but also embarrasses the State. The committee also recommended that in future all laid down procedures should be followed to ensure transparency.
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