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November 3, 2020

PQA warned of NAB reference if LNG terminal concerns remain unaddressed

Business

November 3, 2020

KARACHI: Transparency International Pakistan (TIP) has warned Port Qasim Authority (PQA) of another NAB reference in case of its failure to allay legal concerns over awarding of LNG terminal contract, people familiar with the matter said on Monday.

TIP recommended to the Port Qasim Authority (PQA) Chairman to address violations on liquefied natural gas (LNG) terminal contract award to avoid National Accountability Bureau (NAB) reference.

“If the allegations of post tender changes are correct, PQA is recommended to address the violations on LNG terminal contract award in order to avoid another NAB reference,” Ghous Mohammad, vice chairman of TIP said in a letter to the PQA chairman.

PQA is already facing a NAB reference in its first LNG terminal on similar post tender changes charges. The latest intimation was in reference to the award of build-operate-transfer contracts for setting up of two new LNG terminals this. Only one terminal was planned originally.

The federal government has been facing stiff resistance from ministries of communications, planning, development and reform and Public Procurement Regulatory Authority on a deal for the establishment of the third LNG terminal at PQA by Lucky Commodities.

In March last year, the Economic Coordination Committee (ECC) of the cabinet directed the ministry of maritime affairs to broaden the scope of scientific study being carried out for the determination of suitable place for the establishment of LNG terminal along the Sonmiani site in the PQA jurisdiction. The ministry of maritime affairs was to expedite the process for the establishment of a third LNG terminal in view of imminent shortage of gas in the country and to submit a progress report to the ECC within 15 days.

The ministry asked the PQA management to review five quantitative risk assessment (QRA) reports related to five potential offshore LNG terminal sites.

In May last year, HR Wallingford submitted their site selection review report, confirming that all the five available QRAs are feasible from navigational standpoint, and quoted estimated capital dredging required for deepening, widening and straightening of main channel at 48 million cubic meters and 10 million cubic meters for the opening of an alternate channel.

The PQA board keeping in view the highest priority started the expeditious process for award of the third LNG terminal at PQA.

Two LNG terminals were awarded to Tabeer Energy and Energas against the recommendation of PQA consultant HR Wallingford and original planning and approval of PQA board that only one LNG terminal should be established.

Letter of intent was also issued to five bidders, which rendered the whole process as non-transparent. “The second party that was awarded the contract belonged to the Lucky Group of which Lucky Commodities is a part thereof, which is in litigation with PQA in Sindh High Court,” said the letter seen by The News.

In a similar case of the award of first LNG Terminal in 2014 to Elengy Terminal Pakistan Limited of Engro Pakistan, post tender changes were made mainly by PQA on the site of LNG terminal not allowed at its sister company site.