ISLAMABAD: Mari Petroleum Company has ignored proceedings of the Economic Coordination Committee (ECC) and is supplying gas to a plant of Engro Fertilizers, a move that has sparked questions of legality.
According to officials aware of the development, the ECC in a meeting on May 23, 2016 had taken up the issue of gas supply to a power generation company (Genco-2) and fertiliser manufacturers including Engro Fertilizers.
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The ECC was asked to approve 60 million cubic feet of gas per day (mmcfd) for the Genco-2 plant, 31 mmcfd for Engro Fertilizers and allocate all unutilised gas volumes from Mari fields.
The committee gave the go-ahead for supply of 60 mmcfd to Genco-2, but put off decision on earmarking 31 mmcfd for Engro Fertilizers. It also did not arrive at a decision on allocating the unutilised gas to the fertiliser industry.
Contrary to the decision, the ECC was later informed that Mari Petroleum was supplying 31 mmcfd of gas to the old plant of Engro Fertilizers to allow the plant to run and produce around 58,000 tons of urea per month.
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Now, the ECC has been requested to regularise the unauthorised gas supply to the Engro plant.
In Mari Petroleum, Fauji Foundation holds 40% shares, the government owns 18.39% shares, Oil and Gas Development Company has a 20% stake and general public have 21.61% shareholding.
“It is surprising that in utter disregard of the ECC, Mari Petroleum is providing gas for the Engro plant; gas allocation is made by the ECC and no company could take such a decision on its own,” an official remarked.
Mari Petroleum has also told the ECC that during the second phase of increase in production from the Habid Rahi reservoir, up to 45 mmcfd could be earmarked for the prospective buyer Genco-2 depending on the installation of a compressor by the buyer.
The Ministry of Water and Power has been seeking more gas allocation for the Genco-2 plant and the seller is also willing to provide additional energy supply.
Accordingly, the Ministry of Petroleum and Natural Resources has proposed that the ECC should allocate 50 mmcfd of additional gas to Genco-2 subject to the installation of a compressor.
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It has recommended the allocation of 26 mmcfd of additional gas to the Engro Fertilizers’ old plant to keep its operation smooth and avoid disruption.
The ministry is also seeking blanket approval for providing the unutilised gas from shallow reserves of Mari Petroleum for the fertiliser plants connected to the company’s dedicated network at a notified price.
Published in The Express Tribune, October 23rd, 2016.
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