OGDCL Denies Foul Play in Awarding $85 Million Uch Compression Project

Oil and Gas Development Company Ltd. (OGDCL) has denied the rumors of awarding $85 million Uch Compression Project (UCP) to a firm in illicit manner.

In a press release, the company stated that its ex-General Manager (GM) Imran Shoukat has concocted a story to malign its present management.

The statement says that Shoukat has no role in the award of contract for UCP. Notwithstanding the intimidation and pressure tactics being relied upon by certain elements, the project will be implemented strictly in accordance with the procedure and rules. Elements interested in the outcome of this case will not be allowed to sabotage the project, it added.

The statement highlighted that  Uch Gas Field is located in Baluchistan and provides low British Thermal Unit (BTU) gas to Uch Power Limited (UPL). Initially, its well head pressure was 2100 psi. However, with the passage of time, pressure has dropped to around 1200 psi and further decline in pressure continues as per reservoir behavior.

In order to meet the contractual obligations with UPL to provide the low BTU gas at a certain pressure, OGDCL engaged internationally reputed firms i.e. Weatherford & Schlumberger, to conduct comprehensive integrated reservoir simulation study. As a result of the study, installation of a compressor station was recommended for continually supplying gas to UPL. The tendering process of UCP was also initiated in the past; however, due to single bidder, it was annulled

OGDCL highlighted that the provision of low BTU gas to UPL at required pressure is the cornerstone for selection of equipment/compressor. Based on available technical information, terms of reference (TORs) were prepared and a press tendering process was initiated. Engineering consultant was hired to prepare tender documents for the engineering, procurement and construction (EPC) contractor through a press tender.

Various Original Equipment Manufacturers (OEMs) interacted with OGDCL and consultants during the tendering process and sought further information/clarifications which were provided to ensure healthy competition.

The statement says that the bids were evaluated in accordance with ToRs and technically responsiveness based on which the financially lowest bidder has been determined. The entire process was completed in accordance with PPRA rules and OGDCL procurement procedures. It is a vital time bound project that is required to be completed in time to avoid a penalty of around $245,000/per day as any shortfall in contract quantity or pressure would expose OGDCL to liquidated damages, it added.