MOL Pakistan’s gas sale deal with Universal Gas Distribution Company Ltd (UGDCL) from the newly developed Razgir field has drawn criticism from its joint venture partners and other private gas distribution companies, who claim that the gas sale bypassed the mandatory competitive bidding process. dawn I mentioned.
This is the first deal of its kind with a privately owned gas distributor, however, the deal has not yet been officially signed with International Gas Distribution Company Limited. But it has upset other private gas distribution companies who claim that the natural resource cannot be sold legally. To a third party without competitive bidding.
The Razgir gas field is 65% owned by state-owned entities. If the deal is completed, UGDCL will get about 50 million cubic feet per day of gas to supply to its private customers, especially CNG plants, through the Sui Northern Gas Pipelines Ltd (SNGPL) network, subject to payment of transportation charges.
The Tal block is located in the Kohat Plateau in Khyber Pakhtunkhwa. MOL Pakistan, a wholly-owned subsidiary of the MOL Group, is a 10% stakeholder and operator in the Tal Block where it drilled the Razgir-1 well in January 2024.
Private gas distributors allege that state-owned companies, under the influence of senior officials, facilitated the deal, violating a 2023 Economic Coordination Committee decision requiring bidding for higher government revenues and shareholder returns.
MOL Pakistan said it has sought approval from the joint venture partners, including Pakistan Petroleum Limited (PPL), Oil and Gas Development Company Limited (OGDCL), with a stake of about 30% each, and Government Holdings (Pvt) Ltd (GHPL) with a stake. 5%.
However, Pakistan Oilfields Limited (POL), which holds a 25% stake, objected to the lack of transparency. POL complained of being excluded from the negotiations and learning about the deal from outside sources. The company called for a competitive tender to avoid potential complications and ensure fair pricing.
Regarding this issue, the Petroleum Department stated that under the State-Owned Enterprises Law, the management of state-owned enterprises is responsible for addressing these concerns.
CEO of the International Gas Distribution Company, Ghias Abdullah Paracha, confirmed the ongoing deal and expressed optimism about its implementation. He defended the deal, pointing out that UGDCL shareholders, especially CNG station owners, were struggling to survive and that the company had previously signed an agreement with MOL in March 2023 to source 15 million cubic feet of gas per day from the Mimikhel field.
Paracha described the current deal as an extension of that agreement. He also criticized competitors for trying to disrupt the market without relevant expertise.
However, concerns remain about the legality and transparency of the sale, with critics urging adherence to bidding requirements to ensure fair distribution and maximize public benefits.