OGRA cancels permit of three Pakistani LNG companies

The permit of three companies were cancelled by the Oil and Gas Regulatory Authority (OGRA) due to failure of taking steps for import and sale of 1,400 mmcfd of Liquefied Natural Gas (LNG). OGRA cancelled the permit of Pakistan Gasport Limited, Global Infrastructure Limited and Elengy Terminal Pakistan Limited to import LNG as they failed to submit a USD 5 million performance bank guarantee, and did not fulfill six other conditions of the import contract. "Arguments of the companies for their failure to achieve the milestones and conditions are not tenable and their conditions precedent for progress of the project, including financial close, are hard to be met within next one or two years," said OGRA in a letter to the Ministry of Petroleum and Natural Resources. The approval by OGRA for the natural gas pipeline capacity allocation to the three companies allowed them to import LNG and transport imported gas through the transmission system of Sui Southern Gas Company Limited (SSGCL) and Sui Northern Gas Pipelines (SNGPL). The letter said "Keeping in view lack of progress and failure to meet the aforesaid milestone, non-compliance of capacity allocation conditions, and TPA rules, etc., by the project developers, the authority has decided to revoke the capacity allocation of said project developers forthwith. However, in future, if the said project developers show progress on their projects then pipeline capacity can be allocated afresh." The organizations were also required to purchase LNG from the local market and construct floating storage and re-gasification unit in Karachi city, but their construction licenses have expired and none of the firms has requested OGRA to extend it. "They have yet not initiated construction of their terminal, no binding agreement has been signed with any potential consumer and no credible evidence has been provided about build-up of financial resources for the purpose," said section of OGRA's letter related to construction of the terminal.