ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) recently issued the first-ever private sector distribution licence for natural gas sales in Sindh to a company incorporated just one day before the licence was granted.
The
Karachi-based firm — Gaseous Distribution Company (GDC) — will be the
first company ever to share the decades-old pipeline network of Sui
Southern Gas Company Limited (SSGCL) and challenge its distribution and
sales monopoly.
The GDC was registered with the Securities and Exchange Commission of Pakistan (SECP) on Dec 21 and granted a 10-year distribution licence on Dec 22.
Licence issued just one day after company’s incorporation
The SSGCL had not given a No Objection Certificate (NOC) for
network-sharing or signed any covenant with the GDC for network
capacity-sharing when the distribution licence was issued by the
regulator, sources in Ogra told Dawn.
Under the licence, the new company is expected to purchase liquefied natural gas (LNG) from a future terminal operator or Pakistan State Oil (PSO) and sell it to select consumers, including CNG stations.
Ogra
had conducted a public hearing to grant the distribution licence to the
Pak Gas Distribution Company on Dec 14. The name was opposed by the
PSO, saying there was a “clear intent to [deceive] the general public
and especially PSO’s customers of ‘Pak Gas’ which is well-known brand”
of the PSO.
On Ogra’s advice, the owners/directors of Pak
Gas Distribution Company changed their nomenclature and applied for
registration as Gaseous Distribution Company. The SECP incorporated the
renamed company on Dec 21 and the procedure for issuance of the licence
was initiated and completed on Dec 22.
Those familiar
with the process suggest there should have been a fresh hearing for the
new name and the licence should have followed an NOC on the network
sharing by the SSGCL. Sui Southern and the Sindh government have been
opposed to the use of LNG, saying the province had sufficient gas to
meet consumption.
Ogra wrote that the petitioner (GDC)
had submitted “the application for change of name from ‘Pak Gas
Distribution Company Pvt Limited’ to ‘Gaseous Distribution Company (Pvt)
Limited’ dated 22-12-2016 along with certificate of incorporation of
petitioner’s company after change of name as ‘Gaseous Distribution
Company (Pvt) Ltd’ dated 21-12-2016, duly signed by joint registrar/in
charge SECP”.
This meant the incorporation was completed a day before the application was filed.
Decision defended
Ogra
chairperson Uzma Adil Khan defended the decision to issue a fresh gas
distribution licence for Sindh. She confirmed that the PSO had objected
to the Pak Gas name and that Ogra sustained the objection, even though
Pak Gas was not registered to the PSO.
Asked why a fresh
hearing was not conducted for the renamed entity, the Ogra chief said
that the licence was issued on Dec 22 because Ogra Member (Gas) Aamir
Naseem was set to retire the same day.
In the past, she
explained, there were public hearings on various issues but decisions
could not be made on critical matters because of lack of quorum, which
nullified the proceedings. Therefore, she said, it was decided that all
three Ogra members should sign all decisions where they had completed
the public hearing process, otherwise the entire process would go to
waste.
She said a fresh hearing for the new name was not
required because all other particulars of the company, including names
of shareholders and directors, remained unchanged.
Ms
Khan claimed that terms and conditions of the licence issued to the GDC
were no different from a distribution licence issued for the SNGPL’s
network to the Universal Gas Distribution Company a couple of years ago.
Published in Dawn, January 9th, 2017
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