ISLAMABAD: In a new development, the federal government has approved merger of two state-run LNG companies — Pakistan LNG Terminal Limited (PLTL) and Pakistan LNG Limited (PLL). Both the companies dealing with LNG will be merged into single entity as autonomous body.
According to a senior official, the new entity after the merger of the two companies will later be merged into Pakistan State Oil (PSO), as the government has not strong economic muscle to provide finances and run the newly amalgamated entity. Last year, Pakistan LNG Limited asked the government to provide $1 billion sovereign guarantee to run its operation relating to import the cargoes.
The government wants, the official said, to handover on later stage the amalgamated entity to Pakistan State Oil (PSO) as it has economic muscle and does not need the government guarantee to run its operations. PSO is already running its operation from 2015 in the LNG business.
According to the letter issued by Petroleum Division, signed by section officer Umer Saeed Khan, addressed to GHPL (Government Holding Private Limited) that the companies Act 2017 provides the procedure of amalgamation of two companies and as per Section 284 (2) (a) of the Companies Act 2017, the scheme of amalgamation is to be approved by resolution of the board of each amalgamating company.
The letter further says, “It is advised that the matter regarding the merger of PLL and PLTL will be placed before the board of directors of the respective companies in the upcoming Board meetings and the implementation of the decision of the federal government following all legal and procedural formalities will be ensured.”
The relevant official says that both the companies have overlapping the job functions and more importantly both the entities did not function up to the mark. PLL is responsible for arranging import of LNG through PGPL terminal and meeting the demand of country after having input from Sui Northern and PLTL was meant to deal with PGPL LNG terminal and the future terminals. Now under new scenario the government is not going to install any LNG with its 100 percent off take guarantee. So PLTL has lost its significance.
When contacted PSO top official said that in various meetings, it was discussed that PLTL and PLL will first be merged and the amalgamated entity will be handed over to PSO, but interesting thing is that only three persons’ office in PSO is dealing with LNG business and it will be difficult to absorb the whole manpower of the two entities.
The manpower of both PLL and PLTL consists of 35-40 persons and PSO will never in any scenario be ready to absorb the staff of the merged entities.
