THE fact that the country’s first consignment of liquefied natural gas is now weeks away from landing would have been cause for cheer, had it not been for the many little glitches that still remain.

The LNG project has been almost a decade in the works — far too long considering it is a very basic technology. Equally basic, unfortunately, are the issues that still mire prospects for the arrival of the first cargo. The construction of the terminal and its smooth operation are not in doubt.

A long-term arrangement for the supply of LNG also appears to be taking shape, although it is not as yet a reality. In the meantime, there are a few rather basic questions, such as who will pay for the first consignment that will have to be ordered soon. One would think such an elementary matter would have been sorted out by now. After all, the government had been going on about the project for months while construction of the terminal was hustled along its timeline.

But all that trumpeting of the project, it turns out, was more air and less music. Construction of the terminal was never part of the government’s portfolio of responsibilities. Perhaps that is why it has proceeded smoothly.

The government’s job was to put in place the policy framework under which parties, public and private, could contract cargoes and have them transmitted up to the point of consumption. Very little of that work has been done.

Today, we have a situation where PSO, the party that blew a trumpet or two of its own back in September when it declared “record high profits” in its quarterly results, is not keen to pay for the first consignment of imported LNG. The buck, therefore, passed to the two distribution companies — SSGCL and SNGPL — both of which are also reluctant to pick up the tab.

Further, no agreement exists on the profits each of these three parties will be allowed to make for their part in the chain, with implications for end-user pricing.

Meanwhile, without a proper third-party framework for use of the transmission companies’ pipeline infrastructure, private parties, such as the CNG sector, are also unable to import their own cargoes.

Power plants that are interested in importing LNG are discovering that there is no agreement on what mechanism will govern the payments they receive from the finance ministry to pay for these imports.

You would think that all this work would have been done by now and at this stage orders would be placed for the first consignments. But it turns out that the petroleum ministry has not worked through much of the policy software required for making LNG imports work.

Either they are too busy, or are living up to the reputation of ineptitude they acquired during the recent petrol crisis.

Published in Dawn, February 28th, 2015

On a mobile phone? Get the Dawn Mobile App: Apple Store | Google Play