SIFC takes notice of JJVL closure

ISLAMABAD: In a new development, Special Investment Facilitation Council (SIFC) has taken the notice of closure of the Jamshoro Joint Venture Limited (JJVL) LPG-NGL extraction plant since June 2020 and directed the Petroleum Division to help resolve the disputes between the plant management and Sui Southern authorities.

The plant can be used as an import substitution industry against LPG import and save the precious foreign reserves being used for import of liquid gas.

“SIFC wants authorities to make the JJVL LPG Extraction plant operational not only to end the import of LPG at the cost of dollars but also to help reduce the LPG prices within the country,” senior officials of the Energy Ministry told The News.

The officials of the SIFC secretariat also confirmed the development, saying this supreme forum has asked the petroleum division to help arrange meaningful dialogue between Sui Southern and JJVL management to find a solution so that the JJVL plant could be operational as soon as possible.

Since the closure of the LPG plant, the country braved the domestic LPG production loss of over 317,000 tonnes with domestic Natural Gas Liquid production loss of over 127,000 tonnes and more importantly, the government has to face the additional burden of over $193 million because of import of LPG to substitute for JJVL LPG production.

In addition, the country also faces a loss of export earnings from NGL amounting to over $86 million and this is how the total system loss from the shutdown of JJVL to the economy stands at over Rs94 billion.

JJVL plant was meeting the energy requirements of around 700,000 under-privileged homes, especially in interior Sindh, not connected with the national gas grid. They were forced to buy more expensive LPG. If the gas consumed in LPG production was used by SSGC for supplying gas to domestic consumers, it would have met the energy needs of less than 120,000 homes. The chief minister of Sindh also wrote to the prime minister requesting the government to resume the supply of gas to JJVL for LPG production to benefit victims of flood-affected areas in Sindh, but the plant was not made operational.

Around 5,000 persons directly and indirectly involved in the full supply chain with JJVL lost their jobs.

At present, the LPG domestic gas cylinder price has escalated to Rs3,550 in the market against the notified price of Rs3,026 and if JJVL is allowed to operate, a reasonable decrease in price can be ensured.