National kitty suffers billions in losses due to expensive LNG import: Nizami

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Pakistan Today Editor Arif Nizami on Monday revealed that the national exchequer suffered a loss of billions of rupees because of the government’s expensive import of Liquefied Nitrogen Gas (LNG) from Qatar through spot buying.

Speaking in his talkshow DNA on Channel 24, Nizami said that Engro installed a terminal for converting liquid LNG into gas at Port Qasim despite criticism. He said that after conversion of LNG, the gas is supplied through the SSGPL system to the Qadirpur Gas Fields from where it is further distributed to Punjab by SNGPL.

“The government first forced PSO to take responsibility for LNG but it refused. Consequently the entire PSO management was sacked. Later the government appointed Shahid Islam as PSO MD and made him agree into buying the LNG but PSO said that it would only do so if SSGPL picks up the gas consignments.

“Engro set up the terminal at a cost of $156 million which is expected to recover its cost in one and half year – the expected profit in 15 years is estimated at $1.8 billion. The price for gasification of LNG was set at $1.5 per mmbtu and processing charges were set at $1.5 per mmbtu whereas the processing fee is 50 cents across the world. Engro will be paid $273,000 every day by PSO regardless of the supply of LNG from Qatar.”

He said that the National Transmission and Dispatch Company Limited had written a letter to the government stating that running the plant on furnace oil was more feasible than operating it on LNG. “Even PSO wrote a letter to the DG Petroleum Ministry saying that pricing of LNG was on the higher side as compared with furnace oil,” he added.

Nizami said that the government had erred by buying expensive gas even though oil prices were decreasing globally and furnace oil would have been a better option.

“After PSO showed reluctance in bearing the cost of the overpriced LNG, the government sought to burden the SNGPL with the rising circular debt which was resisted by Arif Hameed, the recently sacked MD of the gas entity,” he said.