Two state-owned LNG companies merged

ISLAMABAD: In a much-awaited development, at last two 100 percent state-owned LNG entities, Pakistan LNG Limited (PLL) and Pakistan LNG Terminal Limited (PLTL), formally got merged. The merger will be effective from today (January 1, 2021) as PLTL and its board stand abolished.

“Yes, both the companies have been merged with surviving entity of Pakistan LNG Limited that will be effective from January 1, 2021 and the staff of PLTL has been included in the PLL but later on, the said staff will be rationalized,” said Sajid Mehmood Qazi, spokesman of the Petroleum Division. He said that the PLTL company and its board now stand abolished. He also said that SECP’s legal notification was also on the cards about the merger of two state-owned companies. "In future, PLTL will be read as PLL and this will be communicated to all relevant parties."

The Pakistan LNG Terminals Limited (PLTL) was earlier mandated by the GOP to manage the implementation of storage and re-gasification for the country. As such, it will implement and procure the entire LNG re-gasification capacities from the existing as well as new LNG terminals at Port Qasim, Gwadar and Sonmiani. Pakistan LNG Limited (PLL) was mandated by the Government of Pakistan to carry out the business of buying, importing, storing LNG, distributing, transporting, metering and selling of natural gas. Now the surviving entity PLL will be having both the mandates and functions. The task starting from dealing with PGPL terminal and re-gasification issues up to importing and procuring the LNG through tenders will be done in an integrated manner.

The official said that the merger got delayed by almost 14 months as some members of the PLTL board and senior members of its management wanted PLTL to emerge as the surviving entity after the merger, knowing the fact the PLTL lost its significance when the government decided not to install any LNG terminal in future based on take or pay mode; rather merchandised terminals will be installed having no government guarantees for LNG takeoff. The PLL will also be having a limited role as in the future terminals will be built on private-to-private business model but still PLL, if compared with PLTL, has more significance in terms of making business.

When Masood Nabi got appointed as the new MD GHPL, the parent company of both PLL and PLTL, he prevailed on the vested interests causing the delay in the merger and accelerated the process of amalgamation of two companies under Section 283 sub section (2) of the Companies Act.

In the wake of many overlapping functions of both PLTL and PLL, the Cabinet Committee on Government Reforms, headed by Dr Ishrat Hussain, somewhere in November 2019 accorded approval for the merger of two sister companies also with an aim to reduce the expenditure of the companies. Because of this very issue, the government did not initiate the process to appoint regular managing directors of either PLL and PLTL. Now the merger of the two companies will be effective from today (January 1, 2021) and the government will also initiate the process to appoint a regular MD of the surviving entity of PLL.