CNG Association rifts over LNG import mechanism


Lahore: Supply of Liquefied Natural Gas (LNG) to Punjab’s Compressed Natural Gas (CNG) stations through Universal Gas Distribution Company (UGDC) has created a divide within All Pakistan CNG Association (APCNGA) stakeholders resulting in creation of another association named All Pakistan CNG Owners Association (APCNGOA).

The strategy to revive Compressed Natural Gas (CNG) sector in Punjab by its stakeholders is endangered as the gas utility company has not issued NOC to a private company UGDC for import of Liquefied Natural Gas (LNG) from Qatar. Both associations are in favor of using LNG as a fuel mix to improve CNG supply in Punjab after a gap of 8 months, but the difference of opinion stays on its import mechanism.

APCNGA, Supreme Council Chairman and Chief Executive Officer of UGDC Ghayas Paracha while talking to News Lens Pakistan said,” We have established a company to protect and streamline gas supplies to CNG sector of Punjab permanently. UGDC will help to schedule gas supplies to stations ensuring continuous supplies to facilitate the consumers.”

The Ministry of Petroleum and Natural Resources has put CNG sector on the priority list after Independent Power Producers and Fertilizer sector to benefit from LNG imports in reducing the shortfall, especially in Punjab. APCNGA a prime lobby of CNG stakeholders went a step ahead and decided to create a private company to import LNG themselves.

UGDC is facing some problems in getting a license from Oil and Gas Regulatory Authority (OGRA). “We are in the process of completing paperwork to get the license for import of LNG from OGRA,” Paracha revealed.

A spokesperson of SNGPL while telling News Lens Pakistan said,” Sui Northern Gas Pipelines Limited (SNGPL) has refused to issue an NOC for a 20 years license to UGDC for gas sales. UGDC is not authorized to market LNG on CNG stations until they get the license for sale of gas under rule 4 of the Natural gas Licensing Rules 2002 from OGRA.”

UGDC was registered with Securities and Exchange Commission of Pakistan as a private company in July 2014. It collects one million rupees from each member of APCNGA to raise the equity. Out of twelve members running this Association ten were in favor of the idea however the rest of two resisted and decided to leave APCNGA saying that government is the best authority to import, sale and distribute LNG as future of CNG sector cannot be handed over to few people.

Hassan Syed, an ex- member of APCNA showed his concerns while talking to News lens Pakistan. “We think that the company is catering personal interests of few members which do not even own a single CNG station. LNG should be imported by the government, transported and distributed through SNGPL network to avoid monopoly within CNG industry.” Meanwhile, Petroleum Ministry has opened LNG mix CNG for Punjab CNG stations for a week at a tariff rate of Rs 57 per liter. This for a little while has reduced the conflict between two associations, but the rift continues.

“We have collected Rs 1 million from members of APCNGA to meet our financial needs to establish UGDC for importing LNG. Many CNG station owners are not realizing the situation and are emphasizing to get round the clock gas without injecting more money. Relying on government supply will put all CNG stations in the same situation of uncertainty about the availability of gas, “ Paracha added while talking to News Lens Pakistan.

There are around 3.7 million vehicles using CNG as an alternative of petrol in Pakistan. According to APCNGA, the industry altogether has done the investment of Rs 450 billion in the industry’s infrastructure employing 4, 50,000 skilled and unskilled workforce across Pakistan. There are total 3437 CNG stations in Pakistan from which 2292 stations are in Punjab.

However, Paracha said, “UGDC has not been successful in getting the license from OGRA yet so I am returning the money of all stakeholders. I have returned 50% of the amount collected back to the CNG station owners. The rest have shown confidence in the project and are committed to streamlining the UGDC operations.”

At the moment, SNGPL has restored LNG mix gas supply to Punjab CNG stations but we will continue our efforts to get license and import LNG later as we want this business to further succeed, he added.

He said, “99% of the members of APCNGOA are those selling both petrol and CNG under one roof and they want to promote petrol over CNG for their own interests.”

On the other hand, Hassan Syed while talking to News Lens Pakistan denied Paracha’s claim about preference of selling petrol over CNG. He alleged,” Paracha has collected a huge sum of money and is likely to fraud CNG owners in the name of UGDC.”


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