IPPs to be charged $14 per mmbtu for LNG; CNG sector slams curbs
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ISLAMABAD: The Independent Power Producers (IPPs) would be charged a price of $14.02-15 per mmbtu for the Liquefied Natural Gas (LNG).
The government firmed up LNG price for the IPPs as a proposed agreement with the transport sector ran into trouble at the last moment.
A petroleum ministry official told Dawn that the first LNG cargo touched Floating Storage and Regasification Unit (FSRU) at Port Qasim at $8.52 per mmbtu which translated into $10.10 per mmbtu after regasification. This included regasification charges to Engro at $1.37 per mmbtu, retainage in the system during gasification at 1.5 per cent, margin to PSO at one per cent of the price and one per cent to the two gas utilities.
The Sui Southern Gas Company Limited (SSGCL) would charge another 30 cents per unit as transmission charges and return on assets while about 2pc of gas would be used in compression and transmission cost and return on assets to SNGPL.
The Unaccounted for Gas (UFG), known as system losses, had been taken at half a per cent in the transmission system and about 0.06pc.
The gas delivered price at Sawan field, therefore, comes to $12.15 per mmbtu after including $1.75 per mmbtu as general sales tax on the province and the federal government.
About $3 per mmbtu would be added in the shape of gas infrastructure development cess (GIDC) and other taxes.
Sources said the next cargo would have a delivered price of $9.5 per mmbtu that would finally end up at $15 per mmbtu at the IPPs door-step.
Kapco, Sapphire, Saif, Halmore and Orient and partly Fauji Kabirwala have been allocated share in the upcoming cargo but they are still not ready to provide standby letters of credit (SBLCs) so far.
Informed sources told Dawn that the CNG Station owners through Universal Gas Company Limited had inked an agreement with Pakistan State Oil (PSO) for supply of LNG which could not be actualised at the last moment.
The agreement was also to be signed by the SSGCL and the Sui Northern Gas Pipelines Limited (SNGPL), but they could not become part of the agreement.
“The world number one CNG industry should not be blackmailed,” said Ghiyas Abdullah Paracha, a central leader of the CNG stations owners association.
He criticised the government for keeping the CNG stations closed in Punjab for more than six months and demanded their immediate reopening.
He said that CNG sector initiated serious efforts on LNG for CNG project on the direction of the government and over 800 CNG stations in Punjab accepted LNG as fuel while others remained indecisive due to lack of trust over government.
Mr Paracha said the closure of CNG filling stations had left hundreds of thousands of people jobless, deprived masses of economical and clean fuel and pushed many CNG owners to bankruptcy.
CNG owners continue to pay rents, salaries and fixed bills of gas and electricity while the machinery is rusting due to suspended operations, he added.
He also alleged that gas utilities were harassing CNG operators while the government failed to its keep promise of reopening CNG stations in Punjab by March 15, 2015.
He demanded of Petroleum Minister Shahid Khaqan Abbasi to take action against the elements hurting CNG industry.
Published in Dawn, April 14th, 2015
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