LNG import project: MoP may float fresh tender

The Ministry of Petroleum has decided to float a fresh tender for import of liquefied natural gas (LNG), under a multi-billion dollars Pakistan Mashal LNG Project (PMLP) if '4 Gas' company fails to prove its financial health, Business Recorder has learnt.
"If and when '4 Gas' responds to the query, the Petroleum Ministry will seek guidance from the Law Ministry," sources said. 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 fresh tendering for PMLP should also be held," sources said.
"If '4 Gas' proves its financial health, the project may be awarded to it, after seeking guidance again from 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 Ministry of Law, Justice and Parliamentary Affairs on the multi-billion dollars Pakistan Mashal LNG Project (PMLP). The report has not yet been submitted due to delay in '4 Gas' response on its financial health. According to sources, the Ministry of Petroleum is divided over the issue: one group recommends awarding the contract to '4 Gas' and French company 'GDF', whereas another group suggests fresh tendering of the project.
Sources maintain that certain LPG group, that has recently procured the necessary licensc for setting up LNG terminal and has indicated interest in the project, has been active in lobbying for fresh tendering, by scrapping the proposed deal with '4 Gas'.
The Ministry of Petroleum informed the ECC in its meeting held on September 21, 2010 that views of the Ministry of Law had been received and were being reviewed for further action. It was further stated that re-confirmation of the gas price offered by '4 Gas' and its financial health were being ascertained by Sui Southern Gas Company Limited (SSGC), the project facilitator. The Petroleum Ministry also acknowledged that it had received the views of Law Ministry on short term LNG project, which were being evaluated for further action.
The ECC was informed that as per energy security plan, SSGC was facilitating import of LNG by the private sector into Pakistan to overcome the growing gas demand-supply gap. PMLP is expected to import 3.5 million tons per annum of LNG by Q4-2011/Q1-2012.