20 October 2018, News Wires — Pakistani conglomerate Engro Corp Ltd said on Friday it had “no obligation” to renegotiate a contract with the government for imported liquefied natural gas (LNG), a day after the new petroleum minister said it would seek new terms.
A spokesman for Engro said the total contract, to process and supply up to 600 million cubic feet of LNG per day for 15 years, is currently worth about $228,000 per day or about $83 million per year.
Engro’s stance sets up a potential conflict with the new government of Prime Minister Imran Khan, who has promised to scrutinize for corruption all deals made by the previous administration of ousted premier Nawaz Sharif.
Engro said in a statement that the 2013 bidding for its Karachi terminal, Pakistan’s first, was done in a “auditable and transparent” tender process. The terminal came into operation in 2015.
“The government does not have a contractual right to reopen/renegotiate its terms and we are accordingly under no obligation to renegotiate the same,” the firm said in a statement. It also said the government was miscalculating its net profits from the venture.
Petroleum Minister Ghulam Sarwar Khan said on Thursday that the government would seek to renegotiate two LNG terminal deals, saying the previous government had agreed to pay too much.