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ISLAMABAD: The federal government has reportedly decided that the two new LNG terminals must indicate their “required” capacity in the existing pipeline system and to give a commitment in writing to accept it on firm basis from their indicated completion dates, well informed sources told Business Recorder.

Sharing the details, sources said the Cabinet Committee on Energy (CCoE) in its meeting held on Jan 18, while considering two separate summaries submitted by the Petroleum and Maritime Affairs Divisions respectively approved formation of a sub committee under the chairmanship of minister for Planning, Development and Special Initiatives comprising minister for Power, minister for Maritime Affairs, SAPM on Petroleum, SAPM on Power, secretary Power Division, secretary Petroleum Division and secretary Maritime Affairs to deliberate on the issues regarding allocation of pipeline capacity to new terminals and formulate recommendations for consideration of the CCoE.

The first meeting of the above sub-committee was held on January 21, 2021 to deliberate on the issue under reference, however, the meeting concluded without any clear consensus.

Petroleum Division further informed that a subsequent meeting of the sub committee was held on Feb 03, wherein the issue of existing available pipeline capacity to new LNG terminals was discussed at length. Based on the discussions and decisions held in the meeting, a report of the committee was prepared and circulated to all its members.

The report carries following decisions: (i) within 10 days of hereof, each one of the new LNG terminals shall convey its proposed completion date; (ii) OGRA shall allocate spare pipeline capacity until such proposed completion date, of the first of the two LNG terminals, for short term only, on three months rolling basis to any applicant including CNG sector meeting the necessary criteria. Petroleum Division shall convey the Cabinet direction to OGRA for implementation; (iii) the two new LNG terminals shall indicate their required capacity in the existing pipeline system (including 17 Km new pipeline from PQA to Pakland) and commit to take it on 'firm basis from their indicated completion dates respectively. If required capacity is more than the available capacity then each shall be allocated capacity proportionally, still on a ‘firm’ basis; (iv) if the new LNG terminals are delayed on account of any reason, they shall convey it in writing at least three months prior to the originally indicated completion date(s) and advise of the new completion date(s). In such a case, OGRA shall allocate the available capacity until the new revised date(s) of completion and; (v) when the North- South pipeline is completed, and further expansion at the PQA-Pakland route is made, there shall be sufficient pipeline capacity to cater to all, and at such time OGRA can do allocation on a longer-term basis, as needed, as per Rules.

According to sources, the issue was already discussed in the meeting of CCoE held on February 04, 2021. However, some typographical mistakes were noticed in the summary. The Petroleum Division was since directed to submit a revised summary, the summary was, therefore, resubmitted after necessary corrections, for consideration of the CCoE accordingly.

The Cabinet has ratified the decision of CCoE taken on Feb 8, on the summary of the Petroleum Division.

Copyright Business Recorder, 2021

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