SIFC executive panel meets today

ISLAMABAD: The Executive Committee of SIFC (Special Investment Facilitation Council) would take up today (Thursday) the initiation of $5-6 billion in refineries’ upgrade, implementation of amended E&P (Exploration and Production) policy approved by the CCI during the caretaker regime, new merit order of gas allocations and Qatari investment in Energas LNG terminal. The SIFC EC meeting would also discuss the progress on Iran-Pakistan gas pipeline and construction of 80-kilometer part of IP pipeline from the Iranian border to Gwadar. The forum would also take up an update on the TAPI gas pipeline.

The SIFC would also take up the issue of JJVL LPG extraction plant closure and its impact on domestic LPG consumer prices. It would also discuss the update on import option of LPG from Turkmenistan apart from discussing the issue of differential payment of RLNG to fertilizer plants.

The EC SIFC would also take up the Reko Diq project’s advancement with reference to investment from the Kingdom of Saudi Arabia. The meeting would also take up the mega green refinery project of $10 billion and an update on cooperation between PSO, Sinopec and Saudi Aramco.

On the use of local refineries upgradation, the SIFC EC meeting would be updated that the Petroleum Division has sought from Cabinet Committee on Energy (CCOE) an extension in the deadline for local refineries to sign the Implementation Agreements (IAs) for their upgrade projects for another six months under the amended brownfield refineries policy 2023.

The move is aimed at accommodating the country’s two bigger refineries, Pak-Arab Refinery Company (PARCO) and Cenergyico, having over 50 percent contribution in refining output. However, the 6-month extension will delay the initiation of $5-6 billion investment for up-gradation purposes.

The earlier deadline for signing IAs was April 22, 2024, but PARCO could not submit its project upgrade report because no decision was made by its Board of Directors (BoD). The proposed extension in the deadline will enable PARCO to come up with its upgrade project after conducting its feasibility and Cnergyico to settle the dues of Rs47.5 billion under the head of Petroleum Levy with the FBR and Finance Division.

The government had earlier approved the local refineries upgrade policy to ensure environment-friendly Euro-V fuels and decrease in the production of furnace oil.

On the implementation of amended E&P policy, the SIFC EC will take up the delay in submission of implementation framework to Executive Committee of National Economic Council (ECNEC) for its approval to allow the exploration & production (E&P) companies to sell 35 per cent gas to the private sector despite a go-ahead by the Council of Common Interests (CCI) on January 28 this year.

On the issue of merit order for gas allocation, the SIFC will take up delay in getting approval for the new gas merit order allocation from the Economic Coordination Committee (ECC) despite passage of four months. The 9th meeting of the Apex Committee on February 18, 2024 approved the new merit order for gas allocation aiming to stimulate economic and industrial activities with a certain momentum and maintain it for the whole year.

On the issue of Energas LNG terminal, the SIFC would take up this issue as Qatar has asked the Pakistani government to address all obstacles hindering its investment in the long-delayed Energas LNG terminal. The consortium that owns Energas LNG terminal company is seeking pipeline capacities in both the Sui Southern and Sui Northern systems from the government. While the Sui Southern Gas Company (SSGC) board has allocated pipeline capacity, the approval for pipeline capacity from the Sui Northern Gas Pipelines Limited (SNGPL) board is still pending.

The official said incomplete documentation related to the Third Party Access (TPA) is causing delays. The network code, which is crucial for operationalising the network, remains incomplete, with no progress made towards its finalization, the official said.

The meeting would also take up the closure of Jamshoro Joint Venture Limited (JJVL) LPG-NGL extraction plant since June 2020 and its adverse impact on the LPG price within the country. The plant can be used as an import substitution industry against the LPG import and save the precious foreign reserves being used for import of liquid gas.

Since the closure of LPG plant, the country braved 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 the 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.

This correspondent sent questions about the delays in several vital initiatives to the secretary as well as minister of the Petroleum Division but did not receive any response.