The treatment of LNG, which is natural gas cooled down into a liquid state so that it may be securely stored and transported without pressure, is handled by a Liquefied Natural Gas Company. The volume of natural gas decreases to about 1/600th of its initial gaseous form when it becomes liquid, hence simplifying and safety-controlling it.

OGRA Approval for LNG Operations in Pakistan

Any registered firm in Pakistan wanting to run an LNG operation, whether headquartered inside or outside the country, has to request permission from the Oil & Gas Regulatory Authority (OGRA). The application has to follow the formally authorized format.

Provisional License Process Under LNG Rules, 2007

At the first stage, the liquified natural gas company must apply for a Provisional License under Rule 33 of the LNG Rules, 2007. This application must be submitted along with a fee of Rs. 5 million. The Provisional License is valid for one year. During this one year, the license holder must apply for a construction license and complete all the requirements mentioned under Rule 4(3) of the LNG Rules, 2007. If needed, the Authority can appoint a consultant under Rule 31(i) of the LNG Rules, 2007, to review and evaluate the project.

Construction License & Project Monitoring by OGRA

The construction license is valid for two years. The Authority selects a consultant under Rule 33(1)(ii) of the LNG Rules, 2007 once the business tells it that construction has begun to track the process. The consultant verifies that the project is being executed in accordance with the authorized implementation plan. The Authority gives the applicant the operating license after the consultant submits a satisfactory report verifying that the LNG facility has been suitably commissioned.

LNG Company Registration Requirements in Pakistan

The application must include several important documents. You must send some important papers with your application. These papers include a signed copy of your company’s registration certificate, copies of the company’s basic rules (called the memorandum and articles of association), and a signed paper that shows your company has officially started working. You also need to provide a verified copy of your latest audited financial report and copies of the company’s official approval that allows you to submit this application. Rule 4(3) of the LNG Rules, 2007, gives the full list of all the documents you must provide. Rule 4(3) of the LNG Rules, 2007, provides the complete list of required documents.

Application Review Timeline & Approval Criteria by OGRA

Once the Authority verifies that all necessary paperwork is present and the quorum needs are met, it closes the case within 180 days. Approval, meanwhile, depends on several considerations, including the suggested scope of operation, the authorization time, and any further criteria the Authority deems appropriate. Only when the application exactly meets the LNG Rules and the LNG Policy does the Authority award the license.

Validity Period of LNG License in Pakistan

Once granted, the license remains valid for a maximum period of twenty (20) years. While issuing the license, the Authority also considers factors such as the level of investment proposed by the applicant.

Fees (Schedule II)

• Provisional Fee: Rs. 5 million.
• Application for a new license: One-half of one hundredth of one percent of the estimated project cost.
• The following annual fees are payable at the time of grant or renewal of the license and must then be paid yearly in advance:
  • One-half of one percent of the gross revenue earned by the licensee from licensed regulated activities.
  • One-tenth of one percent of the gross sales revenue generated by the licensee from the supply of LNG and/or RLNG.
• If a licensee is involved in supplying LNG or RLNG and also carries out one or more regulated activities, then the fees mentioned in both categories above will apply.

Relevant Laws Governing LNG Companies in Pakistan

• Oil and Gas Regulatory Authority Ordinance, 2002
• Oil and Gas Regulatory Authority LNG Rules, 2007 / S.R.O. 458(I)/2007
• Liquefied Natural Gas (LNG) Policy, 2011