KARACHI: This is with reference to an interview published by the Business Recorder of Chairman and CEO, Associated Group Mr. Iqbal Z. Ahmed (IZA). SSGC would like to clarify its position as follows:
"Agreement between SSGC and JJVL was filed by the Parties and taken on record by the Supreme Court of Pakistan (SCP) on 4th December 2018. The Agreement was for 18 months only and expired automatically on expiry of the said time period, in terms of Clause 8.1 of the Agreement. The same was irrespective of the Final Determination of the revenue sharing formula, which is being finalized without the need to extend the Agreement. This contradicts IZA's assertion that SSGC terminated the Agreement, as it expired automatically and was not terminated by SSGC.
In addition, the Final Determination pursuant to Clause 5 "Determination Report and Order" of the Agreement between SSGC and JJVL, is a stand-alone activity to be conducted by the deemed Receivers and the supervisors of the Project, namely the Chartered Accountants firm of A.F. Ferguson & Co. (AFFCO).
"Contrary to what has been mentioned in the interview, JJVL has sought more time for submission of its data to AFFCO and provided the same to AFFCO only after the provision of the data by SSGC, which the latter was to provide.
"For the sake of record and clarity, SSGC never at any point in time made any commitment to SCP for an alternative arrangement as stressed by IZA. However, SCP in its Order dated 13th June 2018 validated the termination of the MOUs which earlier existed between SSGC and JJVL.
"With respect to IZA contention that SSGC gas system will be put at risk with the injection of "wet" gas into the system, SSGC recently used the services of an International Consultant in order to conduct studies on the way forward. The Consultant advised SSGC that current gas stream at Indus Left Bank Pipeline (ILBP) system is a lean and pipeline quality gas, which means that it will not create any adverse effects on pipeline and its allied installations, if injected directly into the system without any pre-treatment. In this scenario, there would be no problem in injecting the gas directly into Transmission pipeline network without any extraction of LPG/ NGL (Natural Gas Liquid).
"It will be pertinent to mention here that Interim arrangements are always for interim period only and are not for a protracted period or in perpetuity, which JJVL should know having agreed with Clause 8.1 of the Agreement providing for the expiry of the Agreement after 18 months. SSGC being a public sector organization, in compliance of law can only, which it does, whenever need arises, procure goods and services in compliance with PPRA Laws.
"It needs to be understood that SSGC is not in the business of production of LPG or extraction of liquid natural gas, as it is not an E& P company, rather its licence provides, only transmission and distribution of natural gas, in its franchise areas of Sindh and Balochistan.
"LPG which was being extracted at JJVL plant, was only the residue LPG. E&P companies have their own plants, before the field gate. Since these plants may not be efficient to extract 100%, only the residue LPG & NGL was extracted.
"Following this discontinuation of the arrangement, an additional 8 to 10 MMCFD gas would be made available to SSGC system that can either be supplied to the power sector or can be pushed into the Company's Transmission system to bridge any shortage. For comparison purposes, this volume of 8 to 10 mmcfd can also easily feed a population of 400,000 households, equivalent to Sukkur city.
"In addition, contrary to what IZA has asserted, by way of clarification, it may be noted that SSGC-LPG (Pvt.) Ltd. (SLL) has been importing 1500 MT of LPG monthly and not 2500 MT for a long time, even well before the expiry of the Agreement in addition to 1500 MT monthly local LPG procurement".
Copyright Business Recorder, 2020
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