Islamabad: The SUI South South Gas Limited (SSGC) Board of Directors (SSGC) has agreed to reactivate the Jamshoro Coint Coint Venture Limited (JJVL) LPG, which was not practical for more than four and a half years.
The decision is expected to help reduce supply restrictions in the LNG market (LPG) and reduce dependence on expensive imports.
According to the informed sources, SIFC has played a major role in facilitating the settlement agreement between SSGC and JJVL. The agreement, officially supported by the SSGC Council, is a major step towards restoring factory operations.
The sources revealed that the prolonged closure of the JJVL factory led to a financial loss estimated at RS. 96 billion. Under the newly agreed conditions, SSGC will receive 66 % of the previously 57.54 % factory revenue-while JJVL is now required to supply 25 % of LPG production to SSGC at specific prices.
The JJVL (JJVL) is one of the facilities of the main liquefied petroleum gas extraction in Pakistan, designed for natural gas processing and liquefied petroleum gas extraction (LPG), natural gas means (NGLS), and capacitors. Gas resources is located from Sui Southern Gas Limited (SSGC) near Karachi, and it improves it to the commercial sporting liquefied Lazaz gas, which is widely used for local and industrial applications. Before closing it more than four and a half years ago, JJVL played an important role in reducing liquefied oil gas imports, fixing local supply, and supporting energy security. The factory has a proven capacity exceeding 500 metric tons per day, but it works on the basis of gas formation.
The factory has been closed more than four and a half years ago due to legal and contractual conflicts with Sui Southern Gas Limited (SSGC). The closure arose from the Supreme Court’s decision in 2018, which nullified the gas supply agreement between SSGC and JJVL regarding concerns about transparency and pricing.
The SSGC court ordered the stop of gas supplies to JJVL, which led to the forced closure of the factory. The prolonged closure led to major financial losses, estimated at RS. 96 billion, and the increase in Pakistan’s dependence on liquefied petroleum imports in charge to meet the local demand.
With the decision to start the offer again, SSGC and JJVL appointed a pivotal people to finish the touches on the details of the agreement, which is expected to be completed within a week. While the installed capacity of the JJVL LPG factory exceeds 500 metric tons, actual production depends on the formation of gas provided to the elbow. Industry people estimate that it will take about 40 days to resume full LPG production.
Interestingly, the sources noted that the Minister of Petroleum Mustadik Malik did not show great interest in reviving the production of local liquefied natural gas from the JJVL factory. Instead, they appreciated SIFC to take the initiative and make concerted efforts to solve the long problems that led to the forced closure of the factory. Because of the SIFC intervention, the SSGC Council, at its meeting on Thursday, agreed to resume the production of LNG in the JJVL facility.
With the revival of the production of local liquefied petroleum gas, Pakistan is expected to witness a decrease in the import bill while addressing the constant deficit in liquefied natural gas supplies, as the sources added. In the 24th fiscal year alone, the draft import law in Pakistan, related to LPG $ 3.85 billion. The same number for the current fiscal year until the end of January has already exceeded two billion dollars.
Upon calling, the Chairman of the Board JJVL, IQBAL Z. Ahmed, stated that despite the prolonged closure, the company continued to pay salaries, provide Ramadan packages, and distribute Eid gifts to all its employees. Especially confirmed that no one employee was discharged during the closing period for more than four years.
In response to the queries, Vasie Ahmed, director of JJVL, confirmed that the SSGC Council has agreed to resume gas supplies to JJVL according to the conditions that are negotiated transparently with the facilitation of SIFC. He explained that the new agreement, based on a contract by the Supreme Court previously, enhances Pakistani energy security, reduces dependence on expensive liquefied oil imports, and enhances a competitive market.
Despite the four and a half years challenged closure, JJVL maintained its workforce and work, as it reaffirmed its commitment to the energy sector in the country. Fasih Ahmed pointed out that SIFC’s intervention had an effective role in overcoming bureaucratic obstacles, which paves the way for JJVL to resume production within 45 to 60 days. He added that this development sends a strong signal to investors, which enhances confidence in the economic scene in Pakistan.
Meanwhile, despite repeated attempts to obtain an official response, SSGC spokesman did not provide any comments on the last decision of the SSGC Council regarding the JJVL operational appeal until this story was presented.
