ISLAMABAD – The National Assembly Standing Committee on Petroleum on Wednesday directed the Sui Southern Gas Company Limited (SSGC) not to renew the contract its LPG extraction contract with the Jamshoro Joint Venture Limited (JJVL) despite the Sindh High Court’s Tuesday orders that allowed SSGC to do so.
The committee said the contract should not be renewed without a fresh bidding process; however, it permitted gas supplies during the interim period. Committee chairman Shaikh Waqas Akram convened the meeting of the committee a day before the contract was to expire on February 3 (today). The committee directed the Ministry of Petroleum and Public Procurement Regulatory Authority to give their legal opinion within 10 days on the agreement between the SSGC and British Petroleum (BP) that sold its assets to United Energy Group of Singapore.
It also directed for a copy of the gas sale agreement between the SSGC and BP be sent to the Transparency International to get their legal opinion. On the demand of the Petroleum Ministry, the committee allowed SSGC to issue Letter of Comfort (LoC) to JJVL during the interim period, saying they did not want disruption of supplies. However, it observed that the tariff for the interim period would be finalised after the re-bidding process.
During the proceedings a member asked whether the committee could hold discussions on a subject that was sub judice. Akram said they would proceed, as the matter had been discussed previously as well. He said the rebidding process would be completed in a few months and a new plant could be set up in the next few months.
Briefing the committee, Iqbal Z Ahmad of the Associated Group, owners of JJVL, said the project began production in 2005 with a daily output of 450 tonnes of LPG, but due to the depletion of the gas field, production had declined to 200 tonnes per day at present. He said the company had 20 percent share of LPG market.
Ahmad denied giving LPG quotas illegally, claiming that quotas were given to investors who fulfilled OGRA requirements. He, however, admitted giving quotas to his friends in the army, General (r) Moinuddin Haider, Khalid Maqbool, Rehmat and Begum Muneer Hafiz and Bushra Aitazaz Ahsan after they completed proper legal requirements and invested Rs 100 million.
Ahmad said he would send proposals, other than lowering the taxes, to the committee within the next 48 hours and if implemented they would result in a significant fall in LPG prices. On Tuesday, Justice Amir Hani Muslim of the Sindh High Court had directed the SSGC to continue gas supplies for extraction of LPG to JJVL beyond February 3, 2011.
