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SSGC Board  approves JJVL plant resumption on SIFC directed terms

by AMG
March 6, 2025
in Energy
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 SIFC seeks closure of FIA inquiry against SSGC
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  ISLAMABAD : The Board of Directors (BoD) of Sui Southern Gas Company Limited (SSGCL) has finally approved the revenue sharing formula between the gas utility company and Jamshoro Joint Venture Limited  JJVL  as per the directions of Special Investment Facilitation Council, (SIFC)   sources told Newzshewz . 

 The  eleventh   ECM previously directed for resumption of JJVL plant as per revenue sharing formula (to be used as benchmark) which was earlier endorsed by the Supreme Court of Pakistan (SCP) based on agreement between the parties.

  The SCP had approved interim revenue sharing of 57% for SSGC and 43% for JJVL and appointed A.F. Ferguson & Company (“AFFCO”) to determine a final revenue sharing formula, subject to court’s approval. AFFCO determined revenue sharing of 57.54% in favour of SSGC. No product sharing between SSGC and JJVL was provided for in the SCP-approved agreement. However, non-agreement between both the parties has left the matter inconclusive.

 The sources further stated that Working Group meeting held on  January 21, 2025 for reaching an arrangement, however, WG noted that still a gap existed between SSGC’s proposed revenue sharing ratio of 78:22 and JJVL’s offer of 64:36, both allocating 25% LPG to SSGC.

SSGC, however, viewed that with the captive and industrial blend it can be further adjusted to 70:30 and in case of disconnection of Gas to CPPs this ratio will become 56:44.

 The  WG determined that consensus can be achieved on revenue sharing at 66:34 ratio (SSGC: JJVL), with 25% LPG share for SSGC based on the OGRA-notified producer price.

The Executive Committee concurred the decisions of WG meeting held on  January 21, 2025 and directed following:  (i)  JJVL plant must be made operational without any further delay, given national objective of maximizing domestic production of LPG ;(ii) an agreement be reached over revenue sharing at 66:34 ratio (SSGC: JJVL) with 25% LPG share for SSGC based on the OGRA notified producer price. This ratio has been considered being well above the ad-hoc / provisional revenue share of 57:43 (SSGC:JJVL) endorsed by SCP. Revenue sharing of 66:34 (SSGC:JJVL) is based on the actual sales value to SSGC considering actual sales-mix of fertilizer (31%), process (27%) and captive power units (42%) connected to SMSs i.e., FJFC and FFBQL, “Sales Mix” ;(iii) additionally, in the event of price revisions OGRA or changes in Sales-Mix / consumer categories by the Federal Government, the revenue sharing ratios between the parties will be reviewed and revised accordingly ;(iv) pending undisputed dues, payable to SSGC by JJVL, will be cleared before resumption of gas supply to the plant ;(v)  FIA inquiry be concluded on merit, at the earliest. Minister Petroleum/Ministry of Energy – Petroleum Division be kept on board ; and (vi)  SSGC to place the directions from EC / arrangement before its BoD for approval and  Petroleum Division to ensure compliance.

Special Investment Facilitation Council has directed that FIA inquiry against SSGC officials  be concluded on merit, at the earliest while keeping  Minister Petroleum, Dr. Musadik Masood Malik /Ministry of Energy ( Petroleum Division) on board.

Ends

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