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ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) has granted licences for the sale of natural gas/LNG marketing to two private companies on Tuesday rejecting Pakistan LNG Limited’s concern that it would affect the Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company (SSGC) business.

The regulator has granted licenses to Tabeer Energy Marketing (Pvt) Limited (TEMPL) and Energas Marketing (Pvt) Limited (EMPL) Karachi for sale of unutilised/idle capacity of the LNG terminal.

Both companies plan to import LNG by utilising the idle capacity available in the LNG terminal.

According to Ogra, these companies will help mitigate the annual losses incurred by the federal government in the form of capacity charges to terminal and also in the form of lost revenue from the underutilisation of the Sui pipeline network.

Licences are for sale of natural gas/RLNG to consumers (industries, power plants, licensed CNG stations) for an initial period of 10 years with effect from January 8, 2021, and unless revoked earlier.

The licensee shall be entitled to charge RLNG/natural gas price in accordance with the government policy guidelines issued from time to time by the federal government.

The licences have been granted one year to fulfill certain conditions to start operations otherwise; their licences shall stand cancelled or revoked. Agreements needed to be signed: Execution of GTA with the SSGCL and the SNGPL; Execution of service agreement with the SSGC and the SNGPL for metering/billion to the consumers and safety issues; Execution of LNG supplies agreement and execution of agreement with LNG terminal operator.

The licensee shall pay the annual fee of 0.25 percent of the annual turnover/estimated turnover of the licensee from sale of natural gas in respect of the most recent completed financial year.

The licensee shall at all times use reasonable endeavors to ensure that it has the right to sufficient pipeline capacity in order for it to facilitate the maintenance of a reliable supply of gas to the consumers with which the licensee has entered into contractual obligations to supply gas.

The decisions to grant licenses were taken after holding public hearings on the petitions filed by these companies last year.

Copyright Business Recorder, 2021