Demands to place import of LNG in CCI
KARACHI: Government of Sindh has demanded Federal Government that the import of LNG, its ancillary matters such as continuous and uninterrupted supply of LNG, its pricing, storage, transmission, distribution amongst provinces, swapping, revised natural gas tariff, losses etc and its possible use in power generation in the country may be placed before CCI for discussion and decision. Neither ECC nor Cabinet Committee on Energy (CCoE) has constitutional mandate to take policy decisions on natural gas and electricity.
Government of Sindh has further demanded that all relevant reports/documents such as copies of ECC summaries on LNG, LNG services agreements, LNG Supply-Sale-Purchase agreement, feasibility and technical reports, Term sheets, detailed description of LNG transmission across Pakistan including/excluding swapping, exact details of the swapping mechanism, monitoring mechanism for swapping, existing and revised natural gas tariff, Gas Development Surcharge (GDS) etc may be shared with the provinces. Moreover, provincial government representatives may also be included in the LNG Price Negotiation Committee
According to Energy Department, Government of Sindh in a recent correspondence to Minister of Petroleum has strongly protested the planned swapping of natural gas produced in Sindh with imported Liquefied Natural Gas (LNG). Under the planned swapping arrangement imported LNG would be injected into SSGCL transmission system and in turn the entire natural gas produced from Sawan and Zamzama gas field be diverted to SNGPL transmission system. Sawan field of Khairpur and Zamzama gas field Dadu produces over 1,100 MMBTU/day gas. SNGPL supplies gas to Punjab and Khyber Pakhtunkhwa. Government of Sindh in the official letter has said that the proposed swapping arrangement, without the concurrence of the respective provincial government, violate Article 158 which guarantees precedence of natural gas producing province over other in utilization of natural gas. This arrangement may compromises energy security of the province which produces over 70% gas in the country. Moreover, mixing of “imported” gas with the indigenous gas and subsequent revenue determination of coming led gas, without authorization of CCI would be unconstitutional.
Government of Sindh has also rejected Federal Government stand that LNG does not cover under Entry No. 2, Part II of Forth Schedule of the Constitution and LNG is an import item under Entry 27, Part-I Fourth Schedule of the Constitution. Government of Sindh in the same letter has informed the Federal Minister of Petroleum that Ministry of Petroleum, has made an unfounded and erroneous conclusion by limiting the scope of the terms “mineral oil and natural gas” used in the Entry No. 2, Part-II, and declaring LNG merely an import item under Entry No. 27, Part I, Fourth Schedule of the Constitution, respectively. Government of Sindh said that the Constitution does not divide “natural gas” into locally produced or imported. Moreover, considering LNG as an import item may further leads to legal and constitutional complications.