OGDC ready to deliver 100 mmcfd gas to SSGC, produce 1000 bbl oil/day

Apropos to the news item titled 'Multi-billion-dollars scheme" Secret deal for LPG/NGL extraction project', published in a section of press on December 16 & 17, 2011. The OGDC strongly rejects the allegations levelled in the news item and confirms that the news is totally baseless and reflects the assumptions/presumptions and ill information of the writer.
OGDC does not have any secret deal with any vendor, including Jamshoro Joint Venture Ltd (JJVL). OGDC believes in fair play and transparent deals. The correct position is that complete development of Kunnar Pasahki Deep--Tando Allah Yar (KPD-TAY) project comprises installation of gathering facilities dehydration facilities CO2 removal plant, LPG extraction plant, etc, which is being undertaken by OGDC itself. On completion, it is expected to produce 284 mmcft gas, 4800 barrels of oil and 387 tons of LPG per day. The project is expected to be completed in about two years.
However, considering the severe energy crises in the country, OGDC decided to set up the project in two phases. The first phase is installation of portion of gas gathering facilities and dehydration plant, and the rest of the facilities would be completed in the second phase.
OGDC has completed the first phase, and is ready to deliver 100 mmcfd gas to SSGC and produce 1000 barrels of oil per day. Further, extraction of 100 tons per day LPG is also part of the Phase-1. If LPG is not extracted then it will not only damage the national pipeline grid and SSGC's allied installations, but OGDC will also be losing revenue of about $40 million during this period. OGDC is making every effort to meet the needs of the energy-starved nation on fast track basis. The plan of action stated above was shared with major stakeholders of use of gas including Aptma, fertiliser, CNG associations, who all appreciated the efforts of the M/o P&NR.
As the project was envisaged to be completed in two years, but 100 mmcfd gas was to be on fast track, while development strategy of the project was being assessed, OGDC received an unsolicited offer from JJVL for extraction of LPG, to be produced from the project. OGDC only shared the statistics, which is publicly available to all.
OGDC, being a public sector company and the Government of Pakistan having 85 percent shares, decided not to accept the single offer. For the sake of transparency and to give equal opportunity to all those who might be interested in setting up LPG extraction plant during the interim period, the Company invited bids through press for outsourcing of LPG extraction, observing PPRA rules. The tender notice inviting bids was published on November 5, 2011. Considering that probably only local companies would provide the service for extraction of LPG, a period of 25 days was allowed for submission of the bids and, accordingly, the bids were supposed to be opened on November 30, 2011. However, on written request from one of the expected bidders that a period of 30 days be allowed for submission of bids, OGDC management acceded to the request, and finally the bids were opened on December 14, 2011. It is, therefore, confirmed that OGDC had violated neither PPRA rules nor Company's own rules.
It may, however be noted that the final products ie oil, gas and LPG produced through this outsourced services, will be the property of OGDC, and only processing fees for LPG extraction will be paid to the successful bidder during the interim period. The products will be sold by the Company according to the laid down policy of the Government and Company's rules. The contract will be given for a maximum period of two years, and OGDC will be able to terminate the contract by giving a notice of three months, as soon as OGDC's own project is completed.
It is regretfully noted that certain vested interests are continuously making attempts to derail the Company's sincere efforts in assisting GoP to alleviate the sufferings of the masses and industries on account of power shortage, thereby hindering boosting of Pakistan's economy.-PR