Shell Pakistan can’t bring LNG this year, OGRA informed

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ISLAMABAD    –  Oil and Gas Regulatory Authority (OGRA) was informed on Thursday that Shell Pakistan cannot bring LNG this year as Sui Southern Gas Company Limited (SSGCL) has blocked TPA between Engro LNG Terminal Ltd (EETL) and M/s Shell Energy Pakistan (SEP).

Shell Pakistan is seeking a license for sale and marketing of RLNG by utilising additional capacity of Engro LNG Terminal. 

Oil and Gas Regulatory Authority (OGRA) on Thursday held a public hearing on the application of M/s Shell Energy Pakistan for granting marketing and sales of Natural Gas/RLNG of additional capacity of 150 MMCFD of Engro LNG Terminal Ltd (EETL). During the hearing, presided over by Vice-Chairman OGRA, Noor-ul-Haq, the authority raised a number of questions over the legal, transparency, and delayed TPA between M/s SEP and EETL. 

M/s SEP informed OGRA that it cannot bring RLNG this year because SSGC blocked TPA between Engro LNG Terminal Ltd (EETL) and M/s Shell Energy Pakistan (SEP).

Member Gas, Mohammad Arif asked the applicant to explain the additional allocation of EETL capacity to M/s SEP. Whether it is allocated through a transparent manner of “Open Bidding” or bilaterally? He further asked that why M/s SEP registered a Single Man Company (SMC) in SECP for marketing and sales of Natural Gas/RLNG in Pakistan? 

OGRA further asked Shell Pakistan to update the authority about the latest update “Third Party Agreement (TPA)” between M/s SEP and SSGC and why SSGC did not notify the agreement?

The authority also questioned the applicant that why the Coordination Agreement between the two parties was still “incomplete”?

Chief Financial Officer (CFO) of Shell International, Nathan Turner briefed the authority that M/s EETL engaged a number of interested parties for allocation of additional capacity of 150 MMCFD but M/s SEP and M/s EETL have a bilateral agreement.

The regulator further said that the issue whether it was bilateral or open bidding would be taken up when the Authority would take up the issue of additional capacity of EETL.

CFO, Shell International ensured that M/s SEP would not bring RLNG to Pakistan unless it fulfilled all the conditions of authority and government organisations. 

CFO Shell said that M/s SEP and SSGC held a number of meetings to conclude the Coordination Agreement and finalise it in June 2020. SSGC is likely to notify it in the first quarter of 2021, he said. 

Chairman, Shell Pakistan, Haroon-ur-Rashid told the authority that M/s SEP would bring RLNG from its global network and sell it to local consumers like CNG, power, fertiliser, and other industrial units. Shell International, having 12 RLNG terminals and supplies RLNG to 25 countries around the globe with an average two cargos per day.

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