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Saturday Oct 05 2019

LPG crisis looms ahead of winter as Chinese firm closes gas processing facility

Photo: File

ISLAMABAD: As winter season is about to set in, a severe LPG crisis is likely to emerge as Chinese company HBP has closed down the Nashpa gas processing and LPG recovery plant because of the dispute on a host of issues with Oil and Gas Development Company (OGDCL).

OGDCL Spokesman Ahmad Hayat Luk, when contacted, confirmed the development, saying it is correct and that the contractor illegally and recklessly manipulated the software and passwords of the Distribution Control System to jeopardize operations of the plant. 

Tug of war between Chinese company and OGDCL has aggravated to a level where HBP is left with no option but to close down the operation of Nashpa LPG plant from September 30, 2019 whose daily production stands at 300 metric tonnes. 

Also read: OGRA hikes LPG price by Rs7

OGDCL, instead of taking a rational decision towards the resolution of the dispute, has issued a notice to the BHP saying, “Make the project operational immediately otherwise face the penalty of $1.5 million for daily loss OGDCL will incur because of the closure of the plant.”

Sources also say that top management at OGDCL has threatened that it will blacklist the company if the LPG plant is not restored. OGDCL denies the allegation. However, OGDCL spokesman says blacklisting is undertaken with proceedings in accordance with company rules.

Meanwhile, the Chinese company HBP, afte 18 months of fighting through correspondence, has issued a legal notice to OGDCL asking to do take action on the notice within seven days of receiving it, according to reports. 

Also read: Petrol, diesel, CNG, LPG prices go up

The notice wants OGDCL to immediately pay over $100 million ($51.06 million) on of breaches of its obligations under contract and $31 million as pending payments, as well as $14.8 million in the head of Advance Bank Guarantee and $3.7 million as Advance Bank Guarantee for supplying of items. 

The notice also asks OGDCL to grant an extension for completion of project till October 31, 2019 and strictly comply with all its obligations under contract to ensure that no further delays are caused in the completion of the project.

When contacted spokesman of HBP confirmed saying his company has shut down the LPG plant and in the same breath said that his company has also issued the legal notice to OGDCL’s top management asking for meeting its demand within 7 days. 

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