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Apropos a news item "First LNG terminal: SSGC signs controversial deal on idle capacity", published in Business Recorder on December 12, 2017, the news item has stated a number of incorrect facts, the first being that the underutilization of the terminal capacity had resulted in higher terminal charges of USD 1.45 per mmbtu which was passed on to the consumers.
"The company clarifies that the initial tender secured from SSGC for 400 mmcfd of gas which provided for a levelized tariff of USD 0.66 per mmbtu. However, with the recent amendment in the LNG Supply Agreement between SSGC & EETPL, the tolling rate for the additional 200MMSCFD will be 0.1745 USD/MMBTU, which is one of the lowest in the world and will also bring down the overall rate of 600 MMSCFD to 0.4799 USD/MMBTU.
"Furthermore, the company clarifies that no violation of the PPRA Rules has occurred as at the time, ETPL was the only entity operating a fully operational LNG Terminal in the country and no other parties could have participated in the bid meeting the supply date. Consequently, after an RFP was floated, SSGC engaged with ETPL as part of a negotiated tendering process.
"It is important to note that the Engro Elengy Terminal Private Limited won the bid in 2014 for the construction, commissioning and operation of the First LNG terminal of Pakistan. Built in a world record time of 330 days without any delay and operational issues. Since January 2017, the terminal has increased its output to 600 MMSCFD from 400 MMSCFD to meet the rising demand of gas across the country.
"Operating at one of the highest utilization rates in the world, the Engro Elengy Terminal Private Limited continues to provide savings of between USD 1.2 billion to USD 1.5 billion to the national exchequer through import substitution of expensive alternate fuel. Moreover, the assurance of LNG import has kicked off a fast-growing LNG ecosystem and transitive economic activity, this has also facilitated the installation of most efficient gas turbine power plants.
It has also revived over 750 CNG stations operating across Pakistan while uninterrupted gas provisioning has also contributed significantly to the revival of the fertilizer and the textile industries resulting in substantial increase in national production. Lastly, the Company maintains that all its business activities are performed as per its code of conduct and business ethics. Engro has always acted, and continues to act, in a fair and transparent manner - a characteristic that is widely regarded and accepted in both local and international corporate circles," the clarification concludes.

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