The Sui Southern Gas Company will have to face competition in its bid to acquire the sole liquefied petroleum gas import terminal.

Sources close to the matter revealed that another party, reportedly led by Mr Iqbal Z Ahmed, a leading businessman of the country has submitted its bid of PKR 2.25 billion for Progas Pakistan against SSGC’s initial bid of PKR 1.84 billion which was later increased to PKR 2.05 billion.

The sources who wished to remain anonymous further said that SSGC has consented to match the bid offered by the other party and has sought the board’s approval for that. The Sindh High Court is set to rule its decision in this regard on October 14th 2011. The court decision, originally due on September 13th 2011 was delayed for a month.

The acquirer will have to obtain licence from Oil and Gas Regulatory Authority and environmental clearance and negotiate concessions with the Port Qasim Authority. Progas is in liquidation. Its assets are valued at PKR 6 billion against secured and unsecured liabilities of PKR 2 billion.

In the first 3 years of operations, the company not only made money but also paid off its loans and raised fresh capital to continue expanding but then it failed owing to certain policy changes. SSGC has been planning to enter LPG supply chain.

SSGC has already set up three LPG air mix systems of 2.0 million cubic feet per day capacity each. Progas Pakistan Limited is the largest LPG infrastructure and marketing company in Pakistan with its own dedicated import handling terminal at Port Qasim. Its assets include a fully functional multipurpose jetty, trestle, LPG storage facility and downstream logistics and filling plants. The annual terminal capacity is 2 million tonnes. The terminal can handle up to 15,000 DWT vessels with provisions to handle up to 80,000 DWT vessels for LNG imports at additional cost.

(Sourced from www.thenews.com.pk)