Page 4 - AsianOil Week 29

AsianOil SOUTH ASIA AsianOil
Pakistan’s LNG pickle
Securing additional LNG is at odds with Pakistan’s changeable politics
COMMENTARY
WHAT:
A former PM has been arrested over alleged corruption involving an FSRU.
WHY:
Securing energy imports is essential for Pakistan and as such, can fall foul of complicated political drivers.
WHAT NEXT:
LNG demand is rising but changing the rules may deter investors.
PAKISTANI Prime Minister Imran Khan’s anti-corruption drive has ensnared a leading political rival over allegations relating to the cre- ation of the country’s rst LNG import terminal.
Police and Pakistani Rangers arrested for- mer prime minister Shahid Khaqan Abbasi as his vehicle entered Lahore City on July 18. ey were executing a warrant issued by anti-corruption watchdog National Account- ability Bureau (NAB).
NAB has accused Abbasi of violating the Pub- lic Procurement Regulatory Authority (PPRA) rules when he awarded an LNG import and dis- tribution contract to Engro Elengy in 2013. He was serving as petroleum and natural resources minister at the time.
Engro chartered Excelerate Energy’s 150,000 cubic metre Exquisite oating storage and regasi cation unit (FSRU) and moored it to an existing chemicals terminal in Port Qasim. Natural gas is sold to state-owned Sui Southern Gas Co. (SSGC).
NAB has accused Abbasi of abusing his posi- tion at the time to force through details that dis- advantaged the Pakistani people.
For example, the watchdog said renting space at Engro’s facility had cost the country an “astro- nomical” PKR27mn ($169,000) per day for 15 years, when an underused liquid petroleum gas (LPG) terminal also at Port Qasim could
have been retro tted at a cost of PKR30-40mn ($188,000-250,000). Despite what NAB may believe, an LPG terminal is fundamentally dif- ferent from an FSRU.
NAB has also accused Abbasi of assigning Inter State Gas Systems (ISGS) to oversee the terminal’s creation when that should have been SSGC’s responsibility.
ISGS managing director Mobin Saulut, who is under investigation, has accused Abbasi of spearheading the negotiations and has tried to distance himself from the LNG contract’s dra - ing and execution.
Saulut said that when Fauji Oil Terminal and Distribution Co. (FOTCO) raised concerns over the new LNG terminal’s location at Engro’s chemical facility to the then prime minister, Nawaz Sharif, it was Abbasi who stepped in to defend the decision. Saulat claims he did not have the experience to weigh up the proposed location, so the decision fell to SSGC’s technical team and board of directors.
Sharif was sentenced to 10 years in prison in 2018 a er the Supreme Court disquali ed him from o ce in July 2017 over separate corruption charges.
Abbasi has defended his prominent role in the development of the country’s LNG sector, saying many o cials were afraid of being inves- tigated. “Nobody wanted to do anything, as they
Former prime minister Shahid Khaqan Abbasi was arrested on July 18 as his vehicle entered Lahore City. Image: Kalinga TV
P4
w w w . N E W S B A S E . c o m Week 29 24•July•2019