SSGC Demands Redressal of Pending Amounts From Jamshoro Joint Venture Ltd

The Sui Southern Gas Company (SSGC) Limited has stated that clearance from the National Accountability Bureau (NAB) is required for entering into any new arrangements with Jamshoro Joint Venture Limited(JJVL) for the resumption of gas supply.

The SSGCL, in a letter, told the Energy Wing of the Planning Commission that SAPM on Institutional Reforms and Austerity pointed out that the amount due from JJVL should be fully recovered (PDL & SSGC outstanding dues) before there is consideration of a new arrangement with JJVL.

The copy of the letter available with ProPakistani stated, “Despite all the implications, limitations and sensitivities, taking cognizance of the concerns of Ministry of Energy (MoE) regarding the shortage of local LPG and the burden on the foreign bill of Pakistan, SSGC reiterates that the following conditions need to be addressed by the Federal Government before the resumption of gas supplies to JJVL Plant.

“Clear opinion from the Law Division/Attorney General of Pakistan that resumption of supplies to JJVL have no adverse legal implications ~ reference may please be made to the legal reference on the illegal award of contract to JJVL. This matter is pending adjudication at the Accountability Courts where SSGC’’s four Ex-MDs and few senior SSGC officials have been implicated under NAB Reference,” it read.

“The JJVL matter is sub-judice with the Accountability court and hence clearance from NAB would be required for entering into any arrangement with JJVL. Exemption from PPRA would be required,” said the letter. “JJVL to clear all outstanding payments from all previous arrangements. The JJVL is required to immediately pay Rs. 3 billion dues,” SSGC demanded.

However, alternatively, SSGC may takeover LPG/NGL extraction operations under the following terms. Since the ownership of gas lies with SSGC, being the designated buyer of GoP, therefore, outcome (inter-alia LPG and NGL) of the extraction process would be the property of SSGC. JJVL will be compensated under the Cost plus Return arrangement. Where, Cost equals Monthly Operations & Maintenance Cost (O&M), based on the current agreement between JJVL and Exterren, Houston, USA. In this case, Return is to be determined by any competent authority such as ECC, OGRA, SCP, etc.

The JJVL plant was shut down for the last 20 months, which has resulted in the reduction of 15 percent indigenous LPG in the system. The closure of the JJVL plant has led to increasing import of LPG as during FY 2020-21, local production catered only for approximately 41pc of demand, while the rest was imported.

Owing to the severe shortage, Prime Minister had directed Petroleum Division to finalize a plan to resume the JJVL plant to mitigate the gas crisis. A committee under Deputy Chairman Planning Commission was constituted for the resolution of the dispute between SSGC and JJVL. After consultation with both the parties, the committee had presented its recommendations to Cabinet Committee on Energy last month.

The Cabinet Committee on Energy had directed the Petroleum Division to send a summary to the Economic Coordination Committee (ECC) of the cabinet regarding the resolution of the SSGC and JJVL dispute.