Leakage in Uch gas line: OGDCL, UPL lock horns over force majeure notice

ISLAMABAD: Oil and Gas Development Company (OGDCL) and Uch Power (Private) Limited (UPL) have reportedly locked horns on the ‘disputed’ force majeure notice on gas supply, well-informed sources in OGDCL told Business Recorder.

On August 22, 2024, OGDCL sent a force majeure notice to the power project and subsequently on August 28, 2024 force majeure cessation notice regarding the claim of the Force Majeure Event on the basis of significant gas leakage in the Uch gas pipeline on August 21, 2024 at 22:15 pm leading to the cessation of gas supply to Uch Power (Private) Limited.

OGDCL, in its FM Notice, claimed that due to torrential rains surrounding the Uch Gas Field the access road to the 26-inch sales line was entirely eroded and hence the Event was beyond its control. Thereafter, OGDCL, in its FM Cessation Notice described the Event as a ‘large crater was developed at the explosion site measuring about 20 feet section of the pipeline was damaged by the unknown miscreants with powerful explosive device’.

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While appreciating OGDCL for the restoration of gas supply on August 25, 2024, UPL rejected OCDCL’s notice of Force Majeure as the latter failed to establish the cause of the pipeline damage that disrupted gas supply as well as failed to demonstrate that the event was beyond its reasonable control as required under Section 13 of the Gas Supply Agreement (GSA).

According to the Power Company, the letter was written without prejudice basis, with all rights and remedies fully reserved. No rights or waivers are granted or implied by this correspondence, it added.

Copyright Business Recorder, 2024