Cabinet panel asks Ogra to suggest legal steps against Engro Elengy

ISLAMABAD: As a probe committee found Engro Elengy at fault for contractual violations by allowing dry docking of its terminal in June, the Cabinet Committee on Energy (CCoE) on Thursday asked the Oil and Gas Regulatory Authority (Ogra) to come up with a proposed legal action and steps aimed at avoiding a recurrence in future.

Presided over by Planning Minister Asad Umar, the CCoE meeting was given a rundown on a progress report of the Federal Investigation Agency (FIA) about the June 2020 petroleum crisis and okayed a plan for improvements in the electricity transmission system.

The meeting also reviewed the Pakistan Oil and Gas Development Plan for attracting Chinese investments to the sector.

A government official said the railways ministry presented a report on the dry-docking dispute. The crux of the findings was that Engro Elengy Terminal Limited (EETL) violated the contractual agreement and decided at a short notice to go for maintenance of its existing terminal and provide a replacement vessel.

CCoE approves a plan for improvements in electricity transmission system

This created a demand and supply problem for natural gas during the peak season for several days.

The sources said that Minister for Maritime Affairs Ali Zaidi was of the opinion that the matter should be taken as a special case so that such events did not happen in future. He said not only was the EETL at fault but also the stakeholders from the government side.

He said that in addition to taking action against the private firm, departmental faults should also be addressed.

Mr Zaidi told the committee that even after repairs the government officials were pressurised to accept the continuation of the Sequoia vessel, but then a short notice of a couple of days was given to withdraw it and to bring back the old Exquisite vessel under the premise that the former vessel was to be deployed to Brazil immediately.

However, he said, this claim turned out to be wrong as Sequoia was still in the region, parked either in Dubai or Qatar.

Energy Minister Hammad Azhar also had some questions of his own over the matter, but Mr Umar prevailed upon his two cabinet colleagues to hold their queries until Ogra came up with recommendations from legal and regulatory perspectives to help CCOE take a final decision.

He asked the regulator to come up with a proposed plan for legal enforcement of the contract so that CCoE could decide what measures should be put in place to avoid such incidents in future.

When contacted, a representative of the Engro Elengy said: “We are not aware of the CCoE meeting discussion and, hence, cannot comment until we become privy to the minutes/official reports.”

“Sequoia came as a replacement vessel only during the dry docking period to avoid a 2-month gas shutdown. On MoE’s request, EETL offered SSGC to exercise its option to retain the vessel and have first right on excess capacity in national interest. SSGC opted not to increase regasification capacity, hence Sequoia has returned back to its operator, Excellerate Energy, strictly as per LNG supply agreement,” the statement added.

An Engro official requesting anonymity, however, confirmed that Sequoia was in Dubai, being readied for use in Brazil.

Presenting its findings on the June 2020 oil crisis, FIA reported that petroleum marketing companies had set up more illegal petrol pumps across the country than Ogra-approved pumps.

The Lahore chapter of FIA has arrested the chief executive officer of Fossil Energy Nadeem Butt, Ogra’s former member for gas Amir Naseem, member for oil Abdullah Malik and Ministry of Energy and Petroleum’s Shafiullah Afridi and Imran Abro.

The committee was informed that a four-day physical remand of the five accused was obtained on Oct 31 and now they had been sent to the judicial lock-up.

The meeting was also told that the accused were allegedly involved in producing illegal petroleum marketing licences, illegal petroleum import quotas, and illegal import of petroleum products, thus causing billions in losses to the national exchequer and money laundering of billions earned from all this.

The CCoE also approved a summary on the Transmission System Constraints Removal Plan presented by the Power Division. It was informed that the transmission capacity of the national grid system in July 2018 was 20,811MW and in August 2021 it was 24,564MW.

In 2023, the capacity would be increased to 33,500MW. The CCoE appreciated the work done by the Power Division.