BR100 Decreased By (-0.7%)
BR30 Decreased By (-0.77%)
KSE100 Decreased By (-0.53%)
KSE30 Decreased By (-0.55%)
BECO 5.66 Decreased By ▼ -0.02 (-0.35%)
BML 63.53 Decreased By ▼ -1.31 (-2.02%)
BOP 33.60 No Change ▼ 0.00 (0%)
CNERGY 8.14 Decreased By ▼ -0.10 (-1.21%)
DCL 11.40 Increased By ▲ 0.05 (0.44%)
FCCL 52.18 Decreased By ▼ -0.73 (-1.38%)
FCSC 5.52 No Change ▼ 0.00 (0%)
FFL 17.75 Decreased By ▼ -0.05 (-0.28%)
FNEL 1.30 No Change ▼ 0.00 (0%)
HUMNL 11.20 Decreased By ▼ -0.04 (-0.36%)
KEL 7.88 Decreased By ▼ -0.09 (-1.13%)
KOSM 5.63 Increased By ▲ 0.19 (3.49%)
MLCF 85.75 Decreased By ▼ -0.26 (-0.3%)
NBP 184.00 Decreased By ▼ -1.00 (-0.54%)
PACE 11.68 Decreased By ▼ -0.34 (-2.83%)
PAEL 40.30 Increased By ▲ 0.09 (0.22%)
PIAHCLA 25.87 Increased By ▲ 0.14 (0.54%)
PIBTL 17.05 Decreased By ▼ -0.27 (-1.56%)
PPL 224.70 Decreased By ▼ -0.60 (-0.27%)
PRL 34.60 Increased By ▲ 0.22 (0.64%)
PTC 64.19 Decreased By ▼ -1.27 (-1.94%)
SEARL 90.40 Decreased By ▼ -0.11 (-0.12%)
SSGC 26.56 Decreased By ▼ -0.20 (-0.75%)
TELE 9.08 Increased By ▲ 0.12 (1.34%)
THCCL 67.23 Decreased By ▼ -2.21 (-3.18%)
TPLP 11.40 Increased By ▲ 0.09 (0.8%)
TREET 24.70 Increased By ▲ 0.15 (0.61%)
TRG 71.14 Decreased By ▼ -0.53 (-0.74%)
WAVES 10.91 Decreased By ▼ -0.54 (-4.72%)
WTL 1.27 Decreased By ▼ -0.01 (-0.78%)

Engro Energy's Qadirpur power project has run into snag as its two key players-Sui Northern Gas Pipeline Limited (SNGPL) and Oil and Gas Development Company (OGDC)-have declined to accept LDs (penalties), saying these were unwarranted and needed to be looked into.
Both SNGPL and OGDC want that Engro Energy should come up with such a formula that could equally protect the interest of all the parties to the project.
Business Recorder's investigations revealed that OGDC has referred a contract to SNGPL for signing a gas sale agreement (GSA) with Engro Energy but with a condition that it will only accept the LDs (penalties) clause if it takes- up the same to ensure that in the case of any failure, which is not on the part of the OGDC, will be acceptable to it.
SNGPL has also the same version on LDs. Its officials are not ready to accept any LDs beyond its system. Its officials had clearly mentioned their point of view at different meetings held to formulate an agreement for ensuring continuous supply of gas to the project.
Pakistan is in dire need of power and for plugging the growing gap in demand and supply it's desperately looking for different options. The officials of PPIB and other concerned department accept any proposal without any hesitation wherein investor ensures that he can produce power for increasing supply to WAPDA or KESC.
PPIB sometimes does not hesitate in violating its rules for award of gas to the party if it ensures that it can bring the project at power generation stage in comparatively less time. In Engro's power project's case the ministry took its proposal to Economic Co-ordination Committee (ECC) of the cabinet which accepted it even without any advertisement in the press.
This step itself is questionable. One wonder how Engro Energy's project was allocated 75 MMCFD permeate gas from OGDC's Qadirpur field without any press advertisement or competitive bidding. Another question was there no other party or group interested to invest in Pakistan to produce power at the conditions accepted for Engro's project. If so why SNGPL and OGDC or Wapda were reluctant to accept LDs conditions.
Permeate gas is an off-gas from Gas treatment facility of Qadirpur gas field. SNGPL and OGDC's point of view as to why they should accept huge LDs for which they were not responsible make sense. Their officials say that they will like to be held responsible for their individual act.
Engro's demand that the government should share penalty does, not seem working. The government can hardly have such facility for one when many others were already in queue for looking the same treatment.
One thing which both SNGPL and OGDC made clear is that they will neither accept LDs in their exiting form nor sign gas sale agreement GSA with Engro Energy for power generation.

Copyright Business Recorder, 2007

Comments

Comments are closed for this article.