ISLAMABAD: The Secretary Petroleum, Asad Hayaduddin, is set today (Thursday) to finalize the modus operandi for merger of the state-owned LNG companies — Pakistan LNG Limited (PLL) and Pakistan LNG Terminal Limited (PLTL). The government has nominated directors on the board of directors (BoDs) of both the companies and their chairmen to attend the meeting.
This meeting is to be held in the light of federal government’s decision to approve the merger of PLL and PLTL in principle. Their merger will be placed before the board of directors of the respective companies in the upcoming Board meetings to implement the federal government’s decision while ensuring that all legal and procedural formalities are followed, a senior official at the Petroleum Division told The News. "Now both the companies dealing with LNG will be merged into single entity as an autonomous body."
According to a senior official, the new entity will later be merged into Pakistan State Oil (PSO), as the government does not have strong economic muscle to provide finances and run the newly-amalgamated entity. At one time last year, the Pakistan LNG Limited had asked the government to provide $1 billion sovereign guarantees to run its operation relating to import the cargoes.
The PSO is already running from 2015 the LNG business. The companies Act 2017 provides the procedure of amalgamation of two companies and under Section 284 (2) (a) of the Companies Act 2017, the scheme of amalgamation is to be approved by resolution of the board of each amalgamating company.
The relevant official says that both the companies have overlapping job functions and more importantly they did not function up to the mark. The PLL is responsible for arranging import of LNG through PGPL terminal and meeting the demand of the country after inputs from Sui Northern. The PLTL was meant to deal with PGPL LNG terminal and the future terminals. Now under the new scenario, the government would not install any LNG with its 100 percent off-take guarantees. "So the PLTL has lost its significance."
When contacted, a top PSO official said the PLTL-PLL merger with PSO will pose certain employment issues as only a three-member PSO office deals with LNG business and it will be difficult to absorb the whole manpower of the two entities. "The manpower of both PLL and PLTL consists of 35-40 persons and PSO under no scenario will be ready to absorb the staff of the merged entities."
