JJVL management seeks PM’s help to restart LPG plant

ISLAMABAD: The top management of Jamshoro Joint Venture Limited (JJVL) has sent a note to the Prime Minister of Pakistan saying that the closure of JJVL plant inflicted colossal losses on Pakistan’s economy in the last almost three years and it was vital to make it operational.

The management asked the top man of the government to erase red-tape in the way of making the JJVL LPG extraction plant operational.

The note sent to Prime Minister on May 1, 2023, and copied to Finance Minister Ishaq Dar and Chairman of Energy Task Force Shahid Khaqan Abbasi said that since the closure of the JJVL LPG extraction plant in June 2020, the country braved domestic LPG production loss of over 260,000 tones and NGL (Natural Gas Liquids) production loss of over 104,000 tonnes. Apart from this, the country also struggled with an additional burden of $163 million in foreign exchange because of LPG import.

Further, it said that a loss of export earnings from NGL to the tune of $67 million was also suffered. The total system loss in the wake of JJVL shutdown has increased to over Rs75 billion.

The note also argued that JJVL plant was meeting the energy requirements of around 700,000 underprivileged homes not connected with the national gas grid, especially in Sindh. These households were forced to buy expensive LPG. If the gas consumed in LPG production was used by the Sui Southern Gas Company for supplying gas to domestic consumers, it would have met the energy needs of less than 120,000 homes. In the note, the Sindh chief minister’s letter to the Prime Minister has also been annexed requesting the federal government to resume the supply of gas to JJVL for LPG production for benefiting victims of flood-affected areas in Sindh.

“Around 5,000 persons, directly and indirectly, involved in the full supply chain with JJVL, lost their jobs,” it noted. Mentioning the attached statement of SSGC submitted to the Supreme Court in which the gas utility narrated the benefits it accumulated from the JJVL plant during the period from 2005 to June 20, 2020, it said that it earned around Rs31 billion in net income from JJVL.

The SSGC also said that the overall benefit included, production of LPG 1.720 million MT, production of NGL 0.612 million M, total payments made to SSGC Rs84.999 billion, total payments made to government treasury on account of taxes and duties Rs19.828 billion

The country also saved foreign exchange by substitution of local LPG with the import of LPG worth $1.046 billion during the time and also earned foreign exchange worth $261.224 million by exporting NGL only from 2005 to June 2020. The previous government was opposed to restarting JJVL for unknown reasons. However, recognising their folly, the Prime Minister constituted a Committee in November 2021, headed by the Deputy Chairman, Planning Commission (DCPC) to look into the issue of JJVL and make its recommendations. The Committee recommended the restart of JJVL.