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ISLAMABAD: The Cabinet Committee on Energy (CCoE) has approved the report of the sub-committee regarding the allocation of pipeline capacity to new Liquefied natural gas (LNG) terminals.
The meeting of the committee was held under the Chairmanship of Minister for Planning, Development and Special Initiatives Asad Umar. The Power Division submitted the summary on Payment Mechanism and Agreement with Independent Power Producers (IPPs). The summary was based on the output of the implementation committee that was constituted to convert the MoUs with the IPPs into legally binding agreements.
The CCOE approved the report of the sub-committee constituted on January 18, 2021 regarding the allocation of pipeline capacity to new LNG terminals with the aim of encouraging investment and providing a level playing field for the LNG terminals.
The committee completed its task and agreed on a detailed implementation mechanism with all the Independent Power Producer (IPPs). Secretary Power Division briefed the committee on the salient features of the agreements and other details. He further briefed that the agreements will result in significant savings over the life of these projects.
The CCoE approved the summary with recommendations to send the summary to Economic Coordination Committee (ECC) and the federal cabinet for further approval.
In a meeting held earlier, the CCOE had decided the existing available capacity in the pipeline would be allocated to any applicant, including CNG stations, which met the requisite criteria for a three-month rolling basis till such time the new terminals achieved commercial operation date.
The CCOE’s approval is aimed at providing an equal opportunity for all sectors to use the pipeline capacity in order to provide a fair and level playing field for the new LNG terminals.
The Power Division requested the CCoE approval for ratification of a mistake made in previous summaries submitted to CCoE in its meetings held on February 27 and August 28, 2019, whereby three companies were erroneously included in two different categories at the same time.
The committee took a serious view of the matter. The ministry was asked to rectify the mistake immediately and extent full facilitation to the private investors.
