World's largest single train urea plant set up at Dharki, Sindh by Engro is in distress. Reason; shortfall of gas from January 2011 to June 2012. Last week, Engro sent a letter to claim damages worth Rs 28.85 billion from Sui Northern Gas Pipeline Limited (SNGPL) for non supply of gas.
Engro claimed that its new plant set-up with an investment of US $1.1 billion, received gas for 43 days only in 2012 which is a complete breach of sovereign contract between Engro and SNGPL. Engro's largest private investment ever made in the history of Pakistan by any corporate investor, is suffering due to unfair treatment as SNGPL, despite sovereign contract, continues to deprive the company of gas while other sectors get the same without even the contracts in place.
The notice further states that SNGPL has totally failed to fulfil its contractual obligation of providing un-interrupted gas since January 2011 to its new urea plant in spite of a clear Sindh High Court judgement in favour of Engro that directs complete uninterrupted supply of 100 mmcsfd of gas to the plant. The losses have been calculated on a production loss of 1.32 million tons during this eighteenth month period. SNGPL has reportedly maintained silence on the subject so far. The cessation of gas supply by SNGPL to Engro is under a government order to divert gas for power generation.
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