ISLAMABAD: An initial agreement has been inked before the Gas Sale Agreement (GSA) between the Oil and Gas Development Company Limited (OGDCL) and the Sui Southern Gas Company (SSGC) on the supply of gas from the KPD field - a 10-year-old dispute.
During the audit of the OGDCL for the fiscal year 2020-21, it was observed that there existed a measurement dispute between the OGDCL and the SSGC on the supply of gas from the KPD field during 2012-13 but the management failed to resolve the dispute despite lapse of considerable time.
The SSGC started making provisional payments against invoices raised by the OGDCL from 2017 onwards but the amount pertaining to February 2012 to March 2013 was found outstanding. This resulted in the non-settlement of the measurement dispute on the sale of gas of Rs11.7 billion between the SSGC and the OGDCL.
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All such disputes that are not settled amicably within 60 days from the date of notification of such disputes shall be referred to arbitration.
The measurement facilities shall be as per American Gas Association Committee Report-3 or the latest revision thereof with an online gas chromatograph and flow computer at the delivery point. Measurements facilities at the KPD gas field shall be jointly calibrated and checked every calendar month by both parties.
The OGDCL and the SSGC for the sale of gas from the KPD field, all disputes, controversies or differences that may arise between the parties arising out of or in connection with this agreement shall be settled amicably through mutual negotiations in good faith.
Management explained that the matter has been taken up with the Petroleum Division on February 23, 2023, to advise the buyer, ie, SSGC to settle the issue and sign GSA. The matter is under process.
Audit was of the view that the issue pertained to 2013 but remained unresolved despite the lapse of 10 years, resultantly, entire payment for the months, ie, February 2012 to March 2013 was stuck up.
Copyright Business Recorder, 2023
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