JJVL-SSGC to make pact for renewal: National Assembly panel meeting on February 2

National Assembly Standing Committee on Petroleum and Natural Resources is scheduled to meet on February 2, 2011 a day before Jamshoro and Joint Venture Limited (JJVL) and Sui Southern Gas Company Limited agreement on LPG extraction is up for renewal.
Industry sources say the country was facing energy crisis that could further worsen if major source of LPG supply from JJVL plant was discontinued in case the agreement is not extended. SSGC officials are of the view that it would take around one to two years in setting up new LPG extraction plant if new process of bidding is initiated. "Production from JJVL has also declined from 500 tons to 200 tons per day and therefore new investor will not take more interest in setting up plant due to risk involved because of reduction in production," officials added.
The NA body has stopped SSGC from getting the agreement renewed till the final recommendations which JJVL believes the agreement is legal, contractual and problems including discontinuation of LPG supplies and hefty income on account of royalty to SSGC could arise. "LPG is already in short supply because of winter season and disruption in its supply will cause prices to go sky high," industry sources say.
The JJVL was invited to the subcommittee hearing on October 6, 2010, presided over by PML-N parliamentarian Barjees Tahir. MQM parliamentarian Abdul Waseem and PPP parliamentarian Syed Inayat Ali Shah were also present during the hearing. Barjees Tahir appreciated JJVL role for keeping prices low.
In a recent NA body meeting held in OGDCL house, the report filed by Barjees Tahir was presented bearing no signature of PPP parliamentarian Syed Inayat Ali Shah who also wrote a note of dissent against the report.
Inayat Ali Shah in its note said, "I read the report submitted by Barjees Tahir as Convenor and I am very shocked after reading it because I think that the report was made by a prejudiced mind, only dark aspects of the picture are shown in the report." He further adds: "I found that we must call the company in front of the committee and hear them, as it's not their fault that they became single among the bidders and they also invested a lot of their money and time into this project and they are still running this project."
Regarding fine imposed on JJVL, in its written submission to the NA body, the Competition Commission of Pakistan said: JJVL "abused its dominant position by targeting to keep producer prices low in relation to Saudi Contract Price (CP)." According to data from the Ministry of Petroleum, JJVL has only 20 percent share in Pakistan's LPG production. The CCP order of December 2009 was suspended by the Lahore High Court and the matter is sub judice.