Ogra team’s recommendations Iranian LPG import can expose Pakistan to US curbs

ISLAMABAD: Pakistan can be exposed to a major risk of drawing sanctions from the US and Western countries and diplomatic pressures with grave consequences if it imports Iranian LPG.

This is the crux of Oil and Gas Regulatory Authority (Ogra) recommendations following a visit by a team, constituted by the authority, of Iranian LPG facilities at Taftan from April 6-7.

The Ogra has also found the quality of Iranian LPG to be highly substandard and the LPG transfer facilities at Taftan to be hazardous and can lead to a catastrophic explosion during transfer. The team was sent at the direction of the top management of the regulator. The officials of the Hydrocarbon Development Institute of Pakistan (HDIP) were also part of the Ogra team that inspected the quality of the LPG and other facilities installed at Taftan.

During the survey of Iranian LPG facilities, the Ogra team found them to be substandard posing a serious hazard. The report suggests that during gas transfer an explosion can occur, called BLEVE (Boiling Liquid Expanding Vapor Explosion) releasing a vast amount of energy in the form of shock waves, projectiles, and thermal radiation causing unprecedented annihilation. Iran has been under US economic sanctions for its ambitious nuclear program for decades and Pakistan is unable to lay down the portion of the proposed Iran-Pakistan oil pipeline in its territory because of the sanctions. The Ogra experts have warned against importing LPG from Iran due to the risk of drawing sanctions from the US and other Western countries. The report suggested Ogra sensitize the government on this particular issue and take appropriate actions to stop the LPG import from Iran. They have also highlighted that international agencies hostile to Pakistan operating in Balochistan, can also deliberately sabotage imports at Taftan.

The OGRA team also said it is unclear whether Irani LPG HS Code is under sanction or otherwise as HS Code is mentioned in the Goods Declaration (GD). However, Iranian entities (umbrella companies) and banks are under international sanctions. Therefore, importing Iranian LPG cannot be declared as a legal activity. The team also posed a question if OGRA can give a license to establish an LPG import terminal and LPG Quality testing Lab and regulate unapproved product transfer facilities. And what action the Authority can take if Iranian LPG entities and banks fall under US sanctions.

The OGRA team recommended the maximization of indigenous energy resources especially oil, gas, coal and also LPG (production/extraction) as strongly recommended by Energy Wing (MOPDSI), Policy Wing, Petroleum Division and others. In its conclusion, the team suggested Ogra take necessary actions to ensure safety from a major accident threatening the safety of the general public in Taftan besides seriously studying the grave consequences for the country in view of international sanctions over Iranian LPG.