Islamabad: Engro Corporation has become eligible to encash on April 21 a $50m bank guarantee provided by gas utility Sui Southern Gas Co Ltd (SSGCL), thanks to the failure of the Pakistani government to arrange imported liquefied natural gas (LNG) in time for re-gasification and transmission into the national network through the Engro terminal at Port Qasim.
According to sources, the Engro terminal has been processing nothing since April 16, thanks mainly to the inability of standard LNG vessels to come into Port Qasim due to a problem of draught. Unless Engro waives its service charges as a goodwill gesture, the company will be able to encash SSGCL’s bank guarantee on Tuesday.
In related developments, the heads of three public sector LNG stakeholders – SSGCL, Sui Northern Gas Pipelines Ltd (SNGPL) and Pakistan State Oil (PSO) – were forced by the government to initial a tripartite agreement to facilitate import of the commodity through back-to-back guarantees.
It is reliably learnt that the technical and legal teams of SSGCL were kept by the Petroleum ministry in Islamabad for more than three days to enter into the tripartite agreement, despite stiff resistance by the company’s management because it put all liabilities of failure in LNG supply on the gas utilities.
Incidentally, the state-run PSO has so far failed to enter into a sale-purchase agreement with Qatar Gas or any other supplier.