Customs row delays import of second consignment of LNG

Islamabad
After stalemate in the LNG price talks with Qatargas Company over non-compliance of international laws that govern the LNG transportation and failure of ensuring sustainable payment mechanism to Qatar authorities, the government’s bid to send FRSU (floating re-gasification storage unit) hired by EETPL (Elengy Terminal Private Limited) for 15 years to the open market to fetch LNG, as it did earlier, has hit snags. Pakistan’s customs authorities have barred FRSU from leaving Port Qasim as EEPTL had committed mis-declaration while bringing FRSU in Pakistan.
EETPL had named FRSU as LNG carrier Exquisite and did not mention that the name of the ship is FRSU. The document of Pakistan Revenue Automation Ltd - a subsidiary of FBR - available with The News also disclosed that EETP has committed mis-declaration.
This means that the import of LNG under cargo-to-cargo arrangement as private transaction in the days to come will get delayed at the advent of summer season and the power crisis will aggravate.
It is pertinent to mention that PSO earlier arranged the import of 65,296.984 tons of LNG on March 26, 2016 on behalf of Pak-Arab Fertilizers under private transaction by using FRSU of Engro as LNG carrier. The PSO had not taken the approval of importing LNG as private transaction from any competent forum, which made the transaction unlawful.
When contacted CEO EETPL Imranul Haq Sheikh said that his company did not commit any mis-declaration as when the vessel entered Port Qasim it was LNG carrier and when it got berthed it turned into FRSU. But when his attention was drawn towards the document of the Pakistan Revenue Automation Ltd, he admitted that the name of the vessel was written in the bill of lading number as LNG carrier Exquisite, not FRSU.
However, the top ministry of petroleum official also told The News that the captain of FRSU ship has also reportedly refused to leave the port saying his company Excelerate’s Energy has inked the agreement with EETPL under which it will remain stationed at Engro’s LNG terminal for 15 years for re-gasification of the import LNG and the agreement does not allow him to move and bring more LNG.
On top of it, PSO is facing recovery problems of the amount it used for LNG carrier, as it has not recovered the price of RLNG that is used by the power sector. This means that with the import of LNG PSO has entangled itself into another circular debt. IMF and World Bank have already told the government to fully recover the price of RLNG from its consumers and have barred the government from extending any kind of subsidy on it. Though the government has not provided any subsidy on it, the late recovery will create more financial problems for PSO that is already facing non-recovery of over Rs200 billion from the power sector alone.
Meanwhile, in another development, Sui Northern has asked PSO not import LNG without getting green signal from it. The power sector has informed the ministry of petroleum and natural resources that it will not utilise the imported RLNG unless and until the ministry ensures smooth and unhindered LNG supply. The IPPs have also clearly told the ministry that they are not ready to stop using diesel in the face of erratic RLNG supply. So they have asked the ministry to provide the next consignment of LNG to some other sector as they are not ready to consume the RLNG. The IPPs earlier used RLNG for 5 to 7 days only when the first LNG carrier was offloaded.