Jamshoro Joint Venture Limited (JJVL) has issued what it says a "rebuttal" in response to a news item "Musharraf government's flawed deal with JJVL on LPG: SSGC to award contract to same party beyond February 2011," by Business Recorder on July 15, 2010. "JJVL was awarded through International Competitive Bidding and to suggest otherwise is a wilful misrepresentation of the truth," said the company spokesman.
"The agreement with Sui Southern Gas Company is valid until February next year or over any extension to the gas sales agreement of November 28, 1988, between SSGC and BP," said the spokesman. JJVL processes BP gas via SSGC. "Tandem agreements are a norm in the global oil and gas sector, and in Pakistan, for the practical purpose of securing the value-chain against costly interruption," he added.
"We find it unacceptable that the reporter resorted to unnamed 'official sources' instead of contacting the company," said the spokesman. According to Article 3.3 of the agreement between JJVL and SSGC, the public sector company "does not guarantee nor make any representation relating to the composition, volume or the characteristics of the Composite Associated Gas Mixture or its availability," he said. "JJVL assumed all risks and liabilities at a time when, according to the story itself, the 'LPG business was not as good as it today is.'"
"The reporter has no comprehension of the JJVL-SSGC agreement, which is a public document and which he claims in the story to have access to," said the spokesman. "JJVL's plant can receive up to 220mmscfd of natural gas condensate for processing. If this volume falls below 160mmscfd to, say, 150mmscfd for a continuous period of three months, JJVL loses 6,300 metric tonnes of LPG production or product worth Rs 264.60 million would total $1000 for the entire quarter. "We fail to understand how this qualifies as 'heavy penalties and fines.'"
"The compensatory mechanism has never been invoked and, critically, is only applicable in the event BP provides volumes to SSGC and those volumes are diverted to other avenues," said the spokesman, adding that JJVL has from March 2005 to June 30, 2010, provided Rs 19.93 billion to SSGC and Rs 6.61 billion to the national exchequer," the clarification concludes.