LNG business: OGRA issues ‘provisional licences’ to two private sector companies

ISLAMABAD: In another step towards gas market liberalization, Oil and Gas Regulatory Authority (OGRA) Thursday issued ‘provisional licences’ to two virtual pipeline companies enabling them to complete all formalities under rules and apply for carrying out Liquefied Natural Gas (LNG) regulated activities in the country.

It will help encourage healthy competition in the gas market, support the national economic growth and ensure a reliable supply of energy to the consumers of natural gas, OGRA spokesperson Imran Ghaznavi said in a press statement.

He said the LNG Easy (Private) Limited and Daewoo Gas Private Limited’ would pursue the LNG virtual pipeline project for supply of the commodity through cryogenic bowzers.

“. . . the companies are planning to use berth at Karachi Port Trust (KPT) and berth at Gwadar Port respectively for import of LNG cargos, fill, transport, market and distribute . . . under ‘Integrated LNG Project Structure’ as per Article 2(a) of LNG Policy 2011,” the spokesperson said.

Ghaznavi said these would be the first of its kind projects in Pakistan and help supplying natural gas mainly to off-grid consumers, facilitating national growth.

Two days back, the authority had also granted licences to two private sector companies, Tabeer and Energas, for carrying out regulated activity of sale of natural gas and Liquefied Natural Gas (LNG) for an initial period of 10 years.

The licences were subject to fulfillment of execution of GTAs (Gas Transportation Agreements) with Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipelines Limited (SNGPL), service agreements for metering / billing to the consumers and safety issues, LNG supply agreements, besides signing of contracts with LNG terminal operators.

“In case, the licensees could not comply with the covenant, and failed to start operation within one year of issuance of the licences, the licences granted shall stand canceled/revoked forthwith,” OGRA added.

abeer Energy Marketing (Pvt.) Limited (TEML), a subsidiary of Mitsubishi Corporation, had applied for the licence on April 17, 2020 and Energas Marketing (Pvt.) Limited (EMPL), a sister organization of Energas Terminal Private Limited, on April 16, 2020.

The authority had granted the permits after holding public hearings and fulfilling all legal and codal formalities.

This initiative is part of the Pakistan Tehreek-i-Insaf (PTI) government’s ease-of-doing business plan, introduced to encourage maximum participation of private sector players in the energy field and create a healthy environment of competition among public and private sector companies.