ECC extends Saindak’s contract to Chinese companies – Newspaper
ISLAMABAD: The government on Wednesday approved pricing guidelines for the supply of regasified liquefied natural gas (RLNG) to K-Electric, along with changes to the existing legal framework and an extended agreement with the Saindak Copper-Gold project with Chinese contractors existing for a further period of 15 years.
These decisions were taken at a meeting of the Cabinet’s Economic Coordination Committee (ECC) chaired by Finance Minister Shaukat Tarin which also authorized the issuance of a sovereign guarantee or stand-by letter of credit. (SBLC) worth Rs 6.944 billion as operational Viability Gas. Fund for construction of Sialkot-Kharian highway on build-own-transfer basis.
The ECC has approved a summary from the Ministry of Energy on the determination of the RLNG sale price for the supply of 150 million cubic feet per day by Pakistan LNG Ltd (PLL) to KE. This removes a major impediment to the operationalization of KE’s new 900 MW power project, the first of two units of which is ready for generation.
Under this decision, the ECC approved amendments to the Petroleum Products Ordinance Schedule 2 (Petroleum Levy) and Policy Guidelines for pricing of RLNG, which would henceforth be issued as a statutory regulatory order. also approved by the ECC.
Approves RLNG Rating Guidelines for K-Electric
From now on, the Oil and Gas Regulatory Authority (Ogra) would determine the sale price of the RLNG based on the ex-vessel price of the LNG delivered in accordance with the contract signed by the PLL and KE in accordance with the existing guidelines. Both parties (PLL and KE) signed the RLNG supply contract about two years ago.
When finalizing the price of the RLNG, Ogra would also accept the costs associated with the importation of LNG from PLL, the actual port charges and the margins from PLL in accordance with the existing agreement. All charges under the Operations Services Agreement, including but not limited to capacity charges, terminal usage charges, and terminal retention and management charges would also be taken in reality in accordance with existing directives.
SAINDAK: The ECC also approved an oil division summary for the extension of the lease agreement between Saindak Metals Ltd (SML) and Metallurgical Construction Corporation (MCC) of China for the Saindak Copper-Gold project for a further 15 years, ie until November 1, 2037. The ECC also recommended an annual review of the financial aspect of the project by professional expert agencies.
SML is a 100% public sector entity of the Federal Government responsible for managing the affairs of the Saindak Copper-Gold Project in Chagai District, Balochistan. The project was developed for the exploration, extraction and processing of local blister copper ore. The center invested around Rs 30 billion in the project over a long period since the tenure of the late ZA Bhutto and subsequently declared an Export Processing Zone (EPZ) until October 31, 2022.
China’s state-owned MCC has operated the project on lease since November 2001. The Musharraf administration extended the contract for 10 years from October 1, 2002 under mutually agreed terms not available to the public. The contract was extended twice in 2012 and 2017 for five years each which now expires on October 31, 2022.
The Petroleum Division formed another committee represented by the Ministries of Finance, Law and Justice, Petroleum, FBR, Provincial Government, SML and ISI to negotiate the terms and conditions of the contract extension with MCC for the development of Eastern Ore Body.
Posted in Dawn, February 10, 2022