The Board of Directors of the Sui Southern Gas Company Limited (SSGC) has approved the resumption of operations at the Jamshoro Joint Venture Limited (JJVL) LPG plant, in a move anticipated to ease supply constraints in the LPG market and reduce reliance on costly imports.
Facilitated by the Special Investment Facilitation Council (SIFC), the SSGC and JJVL have inked a revised settlement agreement, officially endorsed by the SSGC Board. Under the newly agreed terms, SSGC will receive 66% of the plant’s revenue. Additionally, JJVL will supply 25% of its LPG production to SSGC at prices notified by the Oil and Gas Regulatory Authority (OGRA).
The new agreement also allows for the review and revision of revenue sharing ratios between JJVL and the SSGC in the event of price modification by OGRA or changes in the sales mix/consumer categories by the federal government. It further directs JJVL to clear pending undisputed dues to SSGC before the resumption of gas supply to the plant. The SIFC has designated the Petroleum Division as the competent authority to ensure compliance.
The SSGC had suspended the gas supply to JJVL in June 2020, inflicting an estimated financial loss of Rs. 96 billion to the economy. Over the course of the four-and-a-half years the supply was halted, Pakistan grew increasingly reliant on imported LPG, further burdening the country’s foreign exchange reserves.
JJVL estimates that the plant will resume production within 45-60 days.
Not only does the resumption of JJVL’s operations send a strong signal to investors, it also reinforces confidence in Pakistan’s economic landscape and energy security.