ISLAMABAD (Jan 20): The Prime Minister Office and the Khyber Pakhtunkhwa government asked clarity from the Petroleum Division over the proposed sale of natural gas from a field in Kohat without bidding to CNG company.
The newly developed Razgir field had finalised the sale of gas to a third party through negotiations instead of open bidding.
KP’s Directorate General of Petroleum Concessions (DGPC) has also reminded the division that it had the power to make a decision on such sales under the Petroleum Policy, 2012.
Minority shareholder proposes deal for sale to third party; other private partner complains of ‘being kept in dark’
The process adopted by the shareholder was against the decision made by the Council of Common Interests (CCI), DGPC Director Mian Nasim Javed said.
The CCI, which included chief ministers of all four provinces, envisaged a competitive process for the sale of gas to third parties and also stipulated that provincial rights under Article 158 should be protected in such deals.
Javed said any arrangement violating Article 158 and the CCI’s decision would not be acceptable to the KP government.
Earlier this month, MOL-Pakistan, the operator and 10 per cent shareholder of the gas field, told its partners that it had finalised the sale of gas to a private firm, Universal Gas Distribution Company Ltd (UGDCL), through negotiations.
Pakistan Oilfields Limited (POL) is the second private shareholder with 25pc stakes.
The remaining 65pc shares are held by three public companies: Pakistan Petroleum Limited (PPL) (30pc), Oil & Gas Development Company Limited (OGDCL) (30pc) and Government Holdings (Pvt) Limited (GHPL) (5pc).
MOL-Pakistan has sought consent from other shareholders for signing of gas sale purchase agreement with UGDCL.
The deal would enable the Islamabad-based UGDCL to acquire gas for its private customers, mostly CNG stations, to be sold through a pipeline network of Sui Northern Gas Pipelines Le (SNGPL) on payment of wheeling charges.
However, POL has claimed that the natural resource, overwhelmingly (65pc) owned by the public companies, could not be legally sold to a third party without competitive bidding.
The MOL-Pakistan has told its partners that its negotiations have concluded with UGDCL for the sale of 35mmcfd gas, the total expected output from the Razgir field.
Under the commercial terms, UGDCL would purchase gas at 16.5pc premium over the Petroleum Exploration & Production Policy 2012, against a 100pc take and pay condition.
POL has objected to this transaction and complained of being “kept in the dark” over the negotiations and concluded terms.
In letters to other shareholders, POL demanded a competitive bidding process for the sale of gas from the field before finalising the buyer and price to avoid any potential complications. ends
