ISLAMABAD: The Executive Committee (EC) of the Special Investment Facilitation Council (SIFC) has directed the Petroleum Division to provide timelines for the completion of the ongoing bidding process by January 10, 2025.
The Committee also instructed that the advertisement for onshore bidding be circulated by January 15, 2025, and for offshore bidding by January 30, 2025, followed by extensive marketing through road-shows and other means, according to well-informed sources who spoke to Business Recorder.
Simultaneously, the Petroleum Division has been tasked with expediting the evaluation process and subsequent adjustments to the offshore fiscal policy based on recommendations from international consultants (Wood Mac). The division is expected to share progress updates with SIFC on a fortnightly basis, with the first report due by January 15, 2025.
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During discussions on pending cases involving Sui Southern Gas Company (SSGC), the Committee decided that the Auditor General of Pakistan (AGP) and the Law Division should hold a Working Group (WG) meeting and resolve outstanding issues through an accelerated legal process. The non-extendable deadline for resolving these issues is set for January 15, 2025.
The EC also addressed the operational continuity of the liquid and LPG terminal at Port Qasim beyond the existing Implementation Agreement (IA).
The Committee noted that while open bidding is generally preferred, it may not be effective in the case of Build-Operate-Transfer (BOT) agreements, especially when critical national assets are involved.
The EC warned that any issues in the ongoing bidding process could negatively impact the LPG and chemicals’ supply chain at the national level, affecting supply and demand and potentially causing volatile price hikes.
It was decided that the ongoing bidding process should continue under the Port Qasim Authority (PQA). However, PQA and the Ministry of Maritime Affairs (MoMA) are to conduct a thorough risk assessment of all potential scenarios and develop a mitigation strategy. They must ensure that the open bidding process leads to a smooth transition without any adverse effects on the country or the downstream industry.
Discussions between PQA and EVTL will begin at SIFC starting from December 30, 2024, regarding an amendment to Article 3.26 of the existing IA. This amendment will allow another round of negotiations with EVTL, using powers under Article 18.1 of the IA, as suggested by the Public Procurement Regulatory Authority (PPRA) and concurred by the Law Division.
The goal is for EVTL and PQA to reach a consensus on new terms, with the re-negotiation process to be completed by January 31, 2025.
Regarding LNG imports in relation to domestic consumption, the Petroleum Division reported that (12+18) cargoes might become surplus due to the closure of captive plants by January 2025. An additional six cargoes may become surplus from K-Electric (KE) by the end of 2025.
The Committee decided that the Petroleum Division should engage concerned stakeholders in a working group to recalibrate LNG imports based on projected demand. Negotiations with suppliers must be completed by January 15, 2025.
Additionally, the Petroleum Division is tasked with exploring the possibility of selling surplus re-gasified LNG (RLNG) to third parties or new customers. The Division is also required to develop a viable solution for addressing approximately 2.8 million pending connection requests for RLNG by January 15, 2025.
On the issue of off-grid captive power industries and on-grid power users, the meeting was informed that they continue to use gas as fuel. The Committee decided that the Petroleum Division, in consultation with all relevant stakeholders, should finalise a mutually agreed-upon way forward for the process industry by January 15, 2025.
Copyright Business Recorder, 2024
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