Economic Disaster then Terrorism -Expose Corrupt Minister Petroleum Shahid Khaqan Abbasi & his lieutenants

Please Expose Corrupt Minister Petroleum GOP & his lieutenants

The LNG Mega Scam has tested our wisdom and vigilance, and fortunately we, the people of Pakistan, have not failed!!  The dragon of this scam has harmed or swallowed many corporate bodies and professionals, but it is now succumbing under the pressure of media and corporate activism!

 After our initial effort to expose this scam, we have extended our hands to recently activated law enforcement agencies and hope they will play their role too!

 The following is an attempt to provide a concise summary of the LNG Mega Scam although it is very difficult to decipher a high-tech, white-collar crime sponsored by the Shahid Khaqan Abbasi                               

It all started by the petroleum ministry through Inter-State Gas Systems (ISGS) who’s MD Mubeen Saulat is now under active investigation by NAB for illegal award of LNG terminal contract to Engro, which is owned by Seith Dawood who is an underhand partner of the so-called rulers of Pakistan.

The background of the scam unfolded when officials of Sui Southern Gas Company (SSGC) reported to the investigators that they were bypassed as the procuring agency by the ministry when the ministry empowered ISGS to award the LNG terminal contract. SSGC officials further stated that they were forced by the petroleum minister to sign an agreement for payment of the capacity payment of US Dollars 272,000 per day (about 3 crore Rupees per day) to the private terminal company of Engro, which amounts to US Dollars 100 million per year from the taxpayers’ money, irrespective of whether the terminal operates or does not operate to regasify LNG.

SSGC stated that they signed that illicit contract on the promise of the petroleum minister that subsequently PSO would provide them the comfort through an undertaking of bearing the cost of the capacity payments to Engro terminal company. However, PSO management declined to provide the said undertaking to safeguard the interest of their company by quoting legal and technical reasons, to which the minister took an exception and the management had to face his ire. The MD of SSGC who signed the illicit contract is under arrest and will hopefully reveal the related facts to the investigators.

Consequently, PSO was incapacitated by cutting its lifeline payments by the government so that the imminent petrol crises, foreseen and pre-warned by PSO management, could not be prevented. This paved the way for getting rid of the PSO management to carry out the illicit LNG project. Accordingly, the entire top management of PSO was sidelined/ suspended and the Board of PSO was dissolved on the pretense of enquiry into the petrol crisis.

Subsequently, Shahid Islam (a pawn) was placed as MD-PSO and was very unusually given the powers of the PSO Board by the government for a short time (on hit and run basis) to illegally import the LNG ships worth multi-million dollars in defiance of all rules and regulations of Pakistan and in absence of the company’s Board and top management.

Shahid Islam is the same person who was CFO of PIA when the present petroleum minister was Chairman of PIA. Shahid Islam is a co-founder of Air Blue and remained jail mate of Shahid Abbasi (petroleum minister) when they were arrested on the same charges of irregularities and fraud in PIA. Later on he fled Pakistan to escape from various fraud investigations and returned in 2013 after Shahid Abbasi had taken charge of the petroleum ministry.

PSO as a public sector company is strictly required under PPRA rules to undertake an open and transparent bidding (giving a fair and equal chance to all prospective bidders) for import of any product and they had strictly been following that principle for all imports of petroleum products. However Shahid Islam imported several LNG ships worth millions of dollars on very expensive rates without bidding from Qatar Gas (specifically a private company called Q3). The procuring agency (in this case PSO) is required under the law to place procuring documents for such high value import transactions on the websites of the Company (PSO) and NAB. PSO has also defaulted on this legal obligation.

In reward, Shahid Islam was granted a hefty salary package as MD of GHPL by the minister, which was not approved by the Board of GHPL. Shahid Islam also took the proposal of the ministry to the Board of GHPL for construction of second LNG terminal through GHPL, but the Board rejected it and two Directors of the Board resigned when they were pressurized by the government through Shahid Islam to approve that illicit project.

Similarly in order to avoid regulatory checks and oversight over illegal import of LNG, the Oil & Gas Regulatory Authority (OGRA) was incapacitated by not appointing its members and by sending its Chairman on forced leave by the government. However, Chairman OGRA got himself restored through the court but he was kept incapacitated by the government by not appointing the members of OGRA required to complete the quorum for the regulatory decision-making.

Seeing what happened to others, the Board and MD of Sui Northern Gas Pipeline Company Limited (SNGPL) refused to sign a similar agreement and their MD was consequently fired by the government. All members of the top management of SNGPL refused the offers made to them by the government one after the other to become MD of the Company (in line with the government’s stick and carrot policy to implement the illicit projects). Although the MD of SNGPL got himself restored through the court, he had to ultimately resign under tremendous pressure of the government.

The regulator (OGRA) has expressed its inability to determine the price of LNG because it has been illegally procured and sold by PSO. Therefore, OGRA has directed PSO to furnish a certificate duly verified by the Ministry of Petroleum & Natural Resources that it complied with all laws and regulations in importing and selling the LNG, and also furnish the invoices of the LNG ships illegally imported by PSO duly approved/ vetted by the petroleum ministry as PSO has stated that it imported LNG on unlawful instructions of the ministry although it did not have the mandate for LNG import without bidding. OGRA has also asked for the government-verified invoices of illegal sale of LNG by PSO (without LNG sales license and without sale price fixed by the regulator) and by gas companies (without getting the sale price approved by OGRA).

PSO and the gas companies have stated that they made the illegal sales on the instructions of the petroleum ministry based on a so-called “provisional price” advised to them by the petroleum ministry although the ministry had no regulatory powers to fix the price of LNG which was the OGRA’s role.

The ministry is refusing to approve the invoices of illegal import and illegal sale of LNG, as required by OGRA, in view of the ongoing NAB investigations into the LNG Mega scam.

Consequently, LNG cannot be billed and its cost cannot be recovered; and the customers to whom the LNG has been provided on the government’s orders are enjoying unlimited credit (including the fertilizer business owned by Seith Hussain Dawood who also owns Engro LNG terminal receiving US Dollars 272,000 per day without operating).

As a most shameful act, the government has appointed the manager of the small notorious one-year old Engro terminal (Sheikh Imran) as MD of PSO. PSO has an extensive network of terminals across the country in addition to 3600 retail outlets and leadership in oil marketing business, earning more than a trillion Rupees sales revenue!! The salary package granted to Sheikh Imran by the government is unprecedented in the public sector of Pakistan. Media has disclosed his Rupees 6 million (Rs. 60 Lakh) per month package, but the petroleum minister is quoting his salary on TV as 24 Lakh per month which is just one element of his salary. This is in accordance with the minister’s track record of information manipulation. He has been stating on TV that the tolling fee being paid to the Engro terminal is 66 cents per mmbtu. When the record of payment was shown to him, he confessed that Engro is being paid a tolling fee @ 147 cents per mmbtu and promised to bring it down to 66 cents in future. In comparison, a bid received by the government for the tolling fee for the second LNG terminal is 49 cents per mmbtu!

Initially the petroleum minister out rightly denied that the LNG cargo had arrived in Pakistan and stated that it would arrive after signing of the treaty between the governments of Pakistan and Qatar.  When the media showed evidence in this regard, the minister stated that the cargo was imported by the private sector. When PSO’s import documents were shown on TV, he confessed that it was imported by PSO but paid by the private sector (now an outstanding payment of more than rupees 20 billion against the imported LNG is in the news!).  When the LC opened by PSO was shown, the minister stated that the cargo was imported by PSO based on proper treaty between Pakistan and Qatar. When the illegal spot purchase deal was disclosed, the minister had to confess that a proper long-term agreement between the governments is not in place, for which he keeps on giving dates! It is unclear how a government-to-government treaty can be signed for import of LNG from a private company in Qatar! The cargoes in question have been imported from Q3, which has private shareholdings of Conoco Philips (USA), Mitsui (Japan) and Qatar Petroleum. Now the minister must be counting on the customary long delays in investigations, particularly against the rulers and their cronies!

 This can only happen in Pakistan in the 21st Century!!!