Mashal LNG project: government defers floating tender till June

Government has delayed floating the tender of multi-million dollars Mashal LNG import project till June 2011 due to change of site for setting up LNG terminal-from onshore to offshore, Business Recorder has learnt. "Earlier Petroleum Ministry had decided to float the tender for award of contract for Mashal LNG import project in mid February 2011," sources said adding that government needs new technical studies due to change of sites for LNG terminal.
"Now government will float tender in early June 2011 after completion of the technical studies," sources said adding that the government has decided to change the site from onshore (Port Qasim Karachi) to a new offshore site. " I am hopeful that after the completion of both Met Oceanographic Study and Environmental Impact Assessment Study (EIAS), the tender will be floated ", senior official of Ministry of Petroleum said adding that due process would take two months to complete the required studies.
Economic Co-ordination Committee (ECC) of the cabinet had decided to scrap the multi-billion dollar Mashal LNG import project and directed Ministry of Petroleum to invite fresh bids in light of the recommendations of Law Ministry.
Earlier ECC headed by former Finance Minister Shaukat Tarin, had awarded 3.5-million cubic feet per annum import of LNG contract to a French company called GDF-Suez and Dutch firm '4Gas' to set up LNG terminal. But Ministry of Petroleum had not tabled a proposal of Vitol/Fauji Foundation in that meeting that led to a controversy and the case landed in the Supreme Court.
The Court in its decision had directed to seek fresh decision from ECC and the Petroleum Ministry re-tabled the proposal of '4Gas' along with Vitol/Fauji Foundation's proposal. ECC had directed to seek opinion of Law Ministry on the issue. Ministry of Petroleum had approached Ministry of Law almost three times to seek an opinion on LNG Mashal Project in light of the decision of Supreme Court. Law Ministry did not change its stance and suggested inviting fresh bids to avoid any controversy on LNG Mashal Project deal in future. The Ministry of Petroleum had placed the matter before the ECC on January 25, 2011 in light of the opinion of the Law Ministry that urged scrapping the deal with Dutch firm '4Gas' and French firm 'GDF' as LNG supplier and directed Petroleum Ministry to invite fresh bids.