Int’l arbitration rejects $573mn claim in LPG terminal case against Pakistan


ISLAMABAD: International Arbitration has dismissed claim of $ 573 million of Progas LPG terminal’s investors against Pakistan for damages owing to decisions of the government.
Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi addressing a press conference Thursday said that the case was filed during previous government but was not pursued properly.
The Minister said that the Progas company had installed a terminal for import of LPG in 2004, which was closed in 2008, adding the terminal was put to auction by the Banks in 2012 in order to recover their loans and was purchased by the Sui Southern Gas Company Limited (SSGCL).
The claimants including Ali Allawi, brother of the former Iraqi prime minister took the stance that the terminal was closed due to the decisions of Pakistani government, the Minister said.
He said that fomer prime minister Shaukat Aziz and former minister for Petroleum Usman Aminuddin took pain and appeared before the tribunal as witness against the Progas terminal company, adding both the persons were even cross-examined. A total expenditures of the case were recorded up to US $ 20 million but due to pursuance by the government the case was decided in favour of Pakistan.
However, according to the decision, the minister said that claimants would have to pay US $ 11 million to Pakistan on account of expenses with mark up. “Arbitral Tribunal unanimously declared that claimants’ case fails in its entirety as they have not discharged their burden of proving that the measures complained of have caused them any damage”, according to the decision. Quoting the decision, the Minister said that it revealed the respondents had not expropriated, either directly or indirectly any property of the claimants.
Replying to a question, he said there was no gas shortage and all sectors were being provided uninterrupted gas supply, adding situation would be better in coming winter. He said a summary had been forwarded to the prime minister for lifting ban on industrial and commercial gas connections, adding 50,000 gas connection would be given during current year and the cabinet would hopefully make a decision in this regard.
He said LPG would be available throughout the year at affordable prices, which would facilitate masses especially those living in remote areas.
He said that import of LPG had been increased manifold from January to July this year as compared to same period last year.
He said OGRA was authorized to issue LPG licenses for opening LPG stations and a total 19 licenses had been issued so far.
An LNG terminal is being installed in Gawadar which would be operational by June 30, 2017 and if it was delayed the executing company would be fined US $ 150,000/ per day, the Minister disclosed.
He said that the government was working on different projects to meet country’s growing energy needs and Pak-Iran gas pipeline project, TAPI, LNG import etc were all part of such efforts. He said massive investment was pouring in oil and gas sector such as laying Nort-south gas pipeline project.
He said Khalifa coastal oil refinery was being set up and its foundation ceremony would be performed next year, adding Euro-II petrol would be provided from January.