The Economic Co-ordination Committee (ECC) of the Cabinet has directed the Ministry of Petroleum and Natural Resources (MoP&NR) to set up LPG air mix plants in the hilly areas as per the policy approved by the Council of Common Interests (CCI), well-informed sources told Business Recorder. Giving the details, the sources said, that Ministry of Petroleum and Natural Resources revealed that while considering shortage of gas, government had been pursuing the option for provision of LPG through air mix plants to the hilly areas/locations where the provision of pipe gas was feasible economically.
SNGPL's Board of Directors (BoD) in its meeting held on June 12, 2014 accorded blanket approval for installation of 20 plants of LPG air mix in areas like Murree and Galliat, northern hilly areas and Azad Jammu and Kashmir. Comprehensive site surveys were conducted in the areas to select potential sites for the installation of LPG air mix plants. Initially, the following three locations of Tehsil Muree viz Tret, Company Bagh and Kurbala Dewal, had been identified for the purpose.
The ECC, in its decision on July 3, 2012 had directed that all proposals of LPG air mix project would be placed before the ECC. After approval of ECC, the project would be submitted to OGRA to claim a rate of return equal to rate of return applicable for gas operations. OGRA would further evaluate the cost of LPG air mix in order to compute the Weighted Average Cost of Gas (WACOG).
According to sources, Ministry of Petroleum and Natural Resources submitted the following proposals for consideration/ approval of ECC of the Cabinet: (i) After the completion of tendering process, the SNGPL's Board in its 468th meeting held on March 7, 2016 had accorded approval for procurement of LPG air mix plants at the identified three sites subject to approval of the ECC and OGRA. The total cost of the project for the installation of LPG air mix plants will be approximately Rs 514 million. The total cost includes the cost of complete LPG air mix plant, LPG storage facility, installation and commissioning, civil works, land gas distribution network. It was envisaged that the funding of LPG air mix projects would be met through company's own resources; (ii) to grant blanket approval of 30 air mix plants each on SSGCL and SNGPL system; and (iii) to grant permission for operation of LNG air mix plants by third party contractors, if required.
The ECC observed that the Council of Common Interests (CCI) had approved the LPG Policy 2016. The ECC was therefore of the view that the matter should be handled in accordance with the LPG Policy-2016, particularly section 4.3 of the policy which supersedes all previous instructions, orders and policies issued by the federal government from time to time in respect of matters specifically covered in the policy. The ECC further was of the view that in the light of LPG policy, 2016 there was no need to place the matter before the ECC of the Cabinet. After detailed discussion, the ECC directed the Ministry of Petroleum and Natural Resources to proceed in accordance with LPG Policy 2016 approved by the Council of Common Interests (CCI).
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