ISLAMABAD: The top executive of a public sector firm —
Pakistan LNG Terminal Limited (PLTL) — has been sacked for imposing
penalties on a second terminal, which has delayed the processing of
imported LNG since June this year.
A senior government
official confirmed that Azam Soofi, managing director of PLTL, was
sacked on Dec 15 by the company’s board of directors. He is said to have
posted a second round of $300,000 per day penalties on Pakistan GasPort
Limited (PGPL) for the continuous delay in commissioning of its LNG
terminal beyond even a revised deadline.
The official
said Mr Soofi had been replaced on a temporary basis by Adnan Gilani,
the chief operating officer of another government entity, Pakistan LNG
Limited.
PLTL — a company under the petroleum division —
had earlier imposed a $30 million penalty on PGPL when its terminal did
not come online in June, as originally committed. The company contested
the penalty and the issue is under arbitration, even though Prime
Minister Shahid Khaqan Abbasi has publicly criticised the penalty
imposed on PGPL.
The second LNG terminal is crucial for
the operation of three LNG-based power plants in Punjab, with a
cumulative capacity of 3,600-4,000MW. These include Balloki, Bhikki and
Haveli Bahadur Shah plants.
According to sources, Mr
Soofi was called to the Prime Minister’s Secretariat last week and asked
to either withdraw the penalty or resign. He declined both offers,
contending that he was not ready to face accountability processes and
would move, as required under the rules, unless ordered in writing to
proceed by the forums concerned.
A hurriedly-called
meeting of the board of directors on Dec 12 to consider Mr Sufi’s
removal remained divided as there was disagreement among members over
the legal merits and demerits of the proposed action.
The
sources said the PM Office and the Ministry of Energy toiled hard over
the next couple of days to secure a majority in the board, which
ultimately sent the PLTL chief packing.
Mr Soofi is said
to have imposed the penalty after the PGPL terminal suffered repeated
problems and could not be commissioned by Nov 28, as required. The
terminal’s three joints were reported to have collapsed on Dec 2, 8 and
10, respectively, as gas pressure built up.
Consequently,
at least three ships carrying LNG and awaiting processing at the PGPL
terminal were diverted and two other orders were deferred. PGPL, the
official said, was liable to pay $300,000 per day for the delayed
commissioning under the agreement. He said a deputy attorney general
contesting the PLTL arbitration was also under pressure to go easy on
the earlier penalty.
The post-commissioning delays
entail penalties exceeding $10m in accordance with the contract signed
and executed with PGPL. LNG consumers had earlier paid penalties to
Engro Elengy at a rate of $272,000 per day through tariff when the
government declared the commissioning of the first LNG terminal two
years ago, while no upstream LNG purchase contracts were in place.
Resultantly,
RLNG consumers and Sui Southern Gas Company had to pay over $2.5 per
MMBTU for re-gasification, instead of the original 66 cents.
This
effectively means that two ‘blue-eyed’ officers of PM Abbasi – Mr
Gilani and his immediate boss Mobin Solat – will run four companies
under the petroleum division. Mr Solat is being tipped as full-time
managing director of Government Holdings (Pvt) Limited (GHPL) – the
parent company of the PLTL and PLL.
He is now heading
GHPL, Interstate Gas Company (ISGC) and PLL, even though former prime
minister Nawaz ordered an inquiry against him after a former ISGC
chairman accused him of record-tempering. Led by the then-foreign
secretary, the inquiry held him responsible and sought a penalty against
him.
At the time, Mr Abbasi – in his capacity as
petroleum minister – had moved a summary to the prime minister to
protect Mr Solat, and later gave him additional charge of two more
companies – GHPL and PLL.
GHPL – created to own
government shareholding in all oil and gas fields in the country – has
tens of billions of rupees worth of funds collected through gas
development charge and meets the financing requirements of PLL and PLTL –
the newly created firms to deal with LNG imports.
Petroleum Secretary Sikandar Sultan Raja did not respond to repeated requests for comment.
