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Tuesday, July 23, 2013
Qatar LNG deal a ‘mega scam in making’: PTIBy Tanveer Ahmed
ISLAMABAD: The Pakistan Tehreek-e-Insaf (PTI) has identified major anomalies in the Qatar LNG deal, being done by the PML-N government, and called it a “mega scam in making” to defraud the people of Pakistan.
A fact sheet of this project, prepared by the PTI, has also refuted the claims that the deal is being reached with Qatar. The party pointed out that in reality, a private US firm Conoco Phillips (CP) will be selling LNG to Pakistan rather than directly by Qatar.
“The so-called government to government deal with Qatar will be through Conoco Phillips (CP), a private USA energy company,” the PTI said in its fact sheet.
It said that the prime beneficiary in this deal is a major business group. The party identified following anomalies in the deal;
“One, the base cost of LNG from CP at Brent at $110/b is $16.99/mmbtu plus additional cost of about $ 2.50/mmbtu to be paid to ENGRO, resulting in a RLNG (Re-gasified LNG) cost of $ 19.49/mmbtu compared to $ 17.707/mmbtu. This is clearly a mega scam to rob the people of Pakistan by about $180 million/year or Rs 18 billion/year.
Two, the Conoco Phillips/Qatari proposal will not allow any price re-opener in the LNG price for the duration of the contract for 20 years whereas prices are expected to go down sharply after 5-7 years.
Three, the Conoco Phillips/Qatari offer will require the government to take or pay for the committed LNG irrespective of Pakistan’s ability to lift or not. They have already indicated that they will not allow resale of any cargo to a third party.
Four, the fact that no tender has been called by MP&NR for tolling basis, to store LNG re-gasify and deliver RLNG to SSGC. The note by Ministry of Petroleum & Natural Resources (MP&NR) secretary to the ECC claimed, ‘as only EVTL can provide these facilities on a fast track basis’ which was an attempt to fool the ECC also.
It has been learnt that a better option of using existing Jetty/Terminal facilities is available from a major port facilities operator. However MP&NR in its haste to justify the deal to favour the pre-selected ENGRO group, has not carried out a survey, or bothered to even call for Expression of Interest (EOI) by interested parties.
Five, the MP&NR has also not considered the technical issues in the strange proposal, wherein ENGRO will supply the FSRU, and deliver 500 mmcfd for about 5-6 days, in two shipments a month to SSGC. It has also been learnt from industry sources that Qatar has explicitly required in the purported deal to supply LNG by its own Q-Flex carriers, and may not deliver LNG to ENGRO-rented FSRU. The questionable deal, apparently, has also not considered that the Qatar Q-Flex carrier cannot berth at ENGRO EVTL Terminal.
Six, on June 14, 2013, the Supreme Court while disposing of the previous LNG case, had directed that the government was bound to ensure transparency and compliance with PPRA Rules in the matter of LNG imports. An ENGRO company was one of the 3 companies whose bids were scrapped in the earlier round. Now the new Qatar deal is also to be negotiated with another ENGRO company for handling 200 million cubic feet per day of imported LNG from Qatar.
Seven, the LPG terminals of SSGC and EENGRO to be converted to LNG are in the main Port Qasim areas. For reasons of safety nowhere in the world are LNG terminals located in the main port areas.”
Courtesy www.dailytimes.com.pk