PEW detects plans of massive fraud


The Pakistan Economy Watch (PEW) on Friday said that the government is planning to buy LNG on inflated rates in the guise of trying to resolve the energy crisis.
All rules and regulations have been relaxed for the import of 500 million cubic feet of LNG per day under a long-term contract, it said. Pakistan will have to pay some five million dollars daily for fifteen years while politicians will get some Rs 400 billion in kickbacks if the deal to import LNG from Qatar on hefty rates is finalised, said Abdullah Tariq, SVP of PEW.
Secretary Petroleum Mr. Muhammad Ejaz Chaudhry has been fired for resisting the deal while efforts are underway to tame Oil Gas Regulatory Authority (Ogra) which has also opposed the deal, he added. Tariq said that the ministers who are uneasy about letters from Ogra against LNG import want the department dissolved or brought under the control of the petroleum ministry. Abdullah Tariq said that current price of LNG is hovering around $ 12.5/per million British thermal units (MMbtu). A 15-year agreement should bring down the cost to $7/MMbtu.
However, the government is planning to buy the same for around $15/MMbtu which will cost slightly over $ 18/MMbtu when transportation cost is included. He said that some friends of an influential politician want the deal finalised at $ 18/MMbtu which will make it available on Karachi port for $ 21/MMbtu. Gas will become more costly after degasification for addition in the SSGC system. Tariq said that gas import from Iran will cost $11 per MMbtu, it will cost $13 per through TAPI but both options are not workable due to political considerations. Qatar seems to be the only option as a vessel from Doha takes 36 hours to reach Karachi, gas transportation from Malaysia take 14 days while it takes one month from to reach from Algeria. It may be mentioned that apart from Ogra, the power companies and private sector have also opposed the import of costly LNG and the government is yet to consider using the cheap alternative of Thar coal.