Fresh bidding for import of 400mmcfd LNG approved

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ISLAMABAD: The Economic Coordination Committee (ECC) on Tuesday scrapped the bidding that took place to import 400 mmcfd LNG as all the bids were found non-responsive and approved rebidding, it is learnt.

ECC Chairman Dr Hafeez A Sheikh expressed irritation over the continuing failure during the last four years to hold a transparent LNG bidding and submit clear summaries in the ECC, said a senior official who attended the meeting.

Due to Sheikh’s displeasure, the ECC has constituted a three-member committee headed by Changez Jamali and comprising secretary finance and secretary law to investigate why the bidding process held earlier was a failure. The committee will also see if the bidding process was deliberately sabotaged.

According to the official, Advisor to Prime Minister on Petroleum and Natural Resources Dr Asim Hussain said: “We are left with no option but to go for fresh bidding. The PPRA representative advocated a single bidding instead of initiating the process afresh but the ECC has accorded approval to a summary of the Ministry of Petroleum and Natural Resources seeking the termination of the previous bidding and permission to hold rebidding for a $25 billion project to import LNG.

Sources claim that rebidding has ostensibly been approved to accommodate the country’s biggest and most influential tycoon in the oil sector. However, Hussain brushed this allegation aside and said that all the bidders had committed minor deviations so the ministry had asked the ECC to either condone the bids or terminate them.

When the issue of marginal or standard gas fields pricing criteria was taken up in the meeting, Dr Waqar Masood, former secretary petroleum and natural resources and incumbent secretary textile objected to the prices of low BTU gas which irked Hussain. Hussain’s response to the comment was: “You are no longer part of the Ministry of Petroleum and Natural Resources so it is none of your business.”

Elengy Terminal Pakistan Limited (ETPL) stood second among the bidders that submitted the bid bond of $1,002,980.47 on time as per the Request for Proposal (RFP). Pakistan Gasport Limited (PGPL) deposited a bid bond of $1,007,194.24, which is more than ETPL. The PGPL submitted the bond 15 minutes after the deadline. Furthermore, Global Energy Infrastructure Pakistan Private Limited However, (GEI) submitted a bond of $990,972.25, which is not at par with the RFP, according to which every bidder is bound to submit a bid bond of $1 million.

Sui Southern Gas Company Limited (SSGCL) invited bids with respect to an LNG facility pursuant to several clauses. For one, all bids had to be submitted to SSGCL by or before 4:00 p.rn. on January 9, 2013. Bids were submitted by a consortium led by the PGPL, GEI, and ETPL.

The PGPL consortium submitted its bid approximately 15 minutes after the deadline. It justified this delay using an electronic message that it received from an SSGCL official which said that the bid could be filed by 5:00 p.m. rather than 4:00 p.m. Additionally, the bid submitted by GEI has been deemed “non-responsive” because it did not fully meet the RFP.

Moreover, bidders were to a submit a bid bond in Pakistani rupees equivalent to $1 million, according to the official exchange rate of the National Bank of Pakistan (NBP) and the State Bank of Pakistan (SBP) on the date of the opening of the bid. Hussain said that the second tender for import of LNG would now be considered as the first one. “The PPRA rules are stringent and need to be revised,” he said while mentioning the PPRA rules in India and Bangladesh. He said that PPRA rules in Pakistan ignore some issues so they should be revisited.

The ECC also approved the Natural Gas Load Management submitted by The Ministry of Petroleum & Natural Resources. The ministry had requested that enhanced gas supply be made available to power plants on the SNGPL system. The ECC agreed that gas companies should be allowed to manage the gas load on their own, while observing general priority order including the curtailment programme. It was decided that first priority would be given to the domestic and commercial sectors. The power and general industries sectors will be accorded second and third priority, respectively. The cement sector will be fourth and CNG sector will be on fifth on the list.

The ECC also accorded its approval to marginal/standard gas fields pricing criteria and guidelines, 2013, submitted by the Ministry of Petroleum & Natural Resources. The guidelines provide for a pricing structure applicable to the oil or gas reservoirs that cannot be exploited economically under the existing E&P Policies, pricing structure and available technologies.

The ECC approved the proposal of the ministry to set the gas prices for marginal fields in accordance with the Petroleum Exploration& Production Policy 2012 with an additional premium of $0.25 per mmbtu for the three zones as defined in the policy. It was also decided that the government shall have the first right to purchase pipelines specification gas from the marginal gas fields at a price that has yet to be determined.

The secretary of the cabinet division presented a report on implementation of the decisions taken by the ECC.

 

Courtesy: The News


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