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Print Print 2023-11-06

Refinery sector: SIFC for assessing Sinopec’s interest

  • ECC also directs Petroleum Division that other interested (credible) parties should be also identified and update be shared with the Apex Council (AC) in its forthcoming meeting
Published November 6, 2023

ISLAMABAD: The Executive Committee (EC) of Special Investment Facilitation Council (SIFC) has directed the Petroleum Division to assess the investment interest of Chinese company M/s Sinopec, in refinery alongside Saudi Aramco and facilitate the company in case of affirmation of its interest by expediting necessary approvals, sources close to Secretary Petroleum told Business Recorder.

These recommendations were firmed up at EC’s meetings held on October 23 and 24, 2023 at the Prime Minister Office.

The ECC also directed Petroleum Division that other interested (credible) parties should be also identified and update be shared with the Apex Council (AC) in its forthcoming meeting.

$10bn refinery: PSO interacting with Bank of China/Sinopec

With regard to petroleum sector, SIFC EC has asked concerned Ministries/ Divisions and Authorities to identify capacity, resource, and investment requirements in the refinery sector, in the short and long run, to enhance refining capacity in the country, including Greenfield and Brownfield projects by holding derailed deliberations.

The issues faced in provision of virtual LNG pipeline and optimisation of LNG terminals should be discussed in the Working Group. Classification of projects in the pipeline may be considered under the China Pakistan Economic Corridor (CPEC) by the relevant Joint Working Group (JWG) of Ministry of Planning, Development and Special Initiatives (MoPD&SI).

Working Group should consider categorisation of “LNG Easy” as terminal operator for application of relevant duty exemption.

All mineral-related crosscutting issues including Reko Diq and Chagai-related infrastructure development, etc., be thoroughly discussed and finalised in the Working Group by inviting all relevant stakeholders including Finance, Planning, Communications and Railways.

Petroleum Division has been directed to update in a summary to ECC to recover RLNG cost diverted to domestic segment (in winter) to be shared with SIFC Secretariat.

An update has also been sought on the process of seeking exemption from PPRA rules for approval of the PLL to avoid curtailment of RLNG supply in winters of FY 2023-24 to be shared with SIFC Secretariat.

Petroleum Division will have to follow up on review of order of Sindh High Court on the development of the complete project for granite extraction- Nagarparker.

Working Group will discuss in detail Energas LNG terminal project and recommendations to be shared with AC.

SIFC EC has also sought update on summary to the ECC for: (i) uniform gas tariff for industrial consumers; and (ii) regionally competitive tariff for industrial consumers to be presented in next AC.

Secretary Petroleum has been directed to devise a gas supply strategy to various sectors, after re-evaluation of existing Merit Order for supply to the industrial and domestic sector, including the Winter Load Management Plan (LMP) developed by SSGCL and SNGPL from November 2023 to March 2024. Proposed changes should be firmed up in Working Group for presentation in AC.

Chairman OGRA and Secretary Petroleum will have to evaluate the possibility to dispose pending marketing licences and relax the condition of five-kilometre distance while keeping safety concerns and to be presented in the next EC.

Secretary Petroleum to seek input of concerned stakeholders on inclusion of TAPI in Foreign Investment (Promotion and Protection) Act (FIPPA) 2022 at the level of Working Group and mutually agreed recommendations should be presented in the next AC.

Secretary Petroleum has been directed that proposals of amendment in Minerals and Industrial Gases Safety Rules, 2010 and reduction of port charges in the context of ongoing discussion between LNG Easy and KPT be deliberated upon at WG level. Issues being faced by KPOGDCL will also be discussed at WG level.

The EC of SIFC was informed that SNGPL signed GSAs in 2016 with NPPMCL (HBS and Balloki) and QATPL (Bhikki). In 2018-19, dispute arose between SNGPL and all three power plants. On August 7, 2023, SNGPL notified NPPMCL of its intention to recover the residual amount of Rs 14.6 billion under its take-or-pay invoices for 2020 and 2021.

In this context, the following proposals of Ministry of Law and Justice be deliberated: (i) Federal Government may issue instructions to SNGPL and NPPMCL and QATPL to enter into a one-time Arbitration Agreement for local arbitration under the Arbitration Act, 1940 and ;(ii) it can be done under section 17(1) of the State Owned Enterprises (Governance and Operations), Act, 2023.

Secretary Cabinet, Secretary Petroleum, Secretary Power, Secretary Law and Chief Secretary Punjab will discuss and submit firmed up recommendations on this issue in the next EC.

Secretary Law and Secretary Petroleum has been directed that Working Group should firm up view on claim of Pure Mineral (Vital Star), keeping in view the possibility of international arbitration on the issue. The sponsors will be heard in WB to ascertain their contention and a report be conveyed to SIFC Secretariat.

Copyright Business Recorder, 2023

Comments

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Cool boy Nov 06, 2023 11:39am
It won't fix issues for Pakistan... China buys cheap Iranian, Venezuelan and Russian crude oil. It has low interest rates for refineries. It will still beat Pakistanis on price. Pakistan does not have guts to buy even semi refined Iranian oil. Chinese even couldn't move out their dollars in cpec power plants I wonder how will they manage to move out dollars in refinery business?
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KU Nov 06, 2023 11:48am
There have been so many MOUs, interests signed and exhibitions held that the mere acknowledgment of these activities should merit an award to all and sundry in SIFC. And that's about it.
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Asif Nov 06, 2023 02:20pm
One more reason to blow more air in stock market bubble . And as always it will burst along with these pipe dreams .
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