The government on Wednesday failed to reach a conclusion to initiate import of Liquefied Natural Gas (LNG) other than extending performance bank guarantee for potential importers, it is learnt. According to sources in the Petroleum Ministry, an important meeting was held here with Dr Asim Hussain, Advisor to Prime Minister on Petroleum and Natural Resources in the chair to settle the issue of LNG import.
Secretary Petroleum, Chairman Oil and Gas Regulatory Authority (Ogra), Director General Petroleum Concessions (DGPC), DG Refineries and Liquefied Gases and DG Gas were also present in the meeting. The meeting discussed the possibility of the LNG import and remained unable to reach a conclusion other than extending performance guarantee for LNG importers, the official added.
"The potential LNG importers were trying to seek an extension in financial close relating to pipeline capacity allocation and today they achieved their goal," a senior official of the petroleum ministry said. Ogra allocated pipeline capacity to the three LNG developers in October 2011 to use the pipeline network of state-run gas distribution companies, so that imported LNG could reach consumers.
"LNG importers were expected to provide financial arrangements, agreements with LNG suppliers and end-buyers to complete the financial close by April-end 2012, but they failed in doing so," the official said. Gas distributors Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipelines Limited (SNGPL) were also directed to invest $1.2 to $1.4 billion to lay new pipelines and create extra room for LNG suppliers. At present, SSGC has the capacity to transport 500 million cubic feet of LNG per day.
Global Energy committed to bring the first consignment of 500 Million cubic Feet (mmcfd) by end of June 2012 followed by Engro in December 2012 and Gas Port in the first quarter of 2013. Ogra had allocated pipeline capacity of 500 million cubic feet per day (mmcfd) each to Global Energy and Engro and 400 mmcfd to Pakistan Gas Port. At time of granting capacity allocation, Ogra had warned LNG developers of cancellation and encashment of bank guarantees if they failed to bring gas into the country within the scheduled time.