Staff Report
ISLAMABAD: Pakistan Gas Port Consortium Limited (PGPC) has emerged victorious in an arbitration case against Pakistan LNG Limited (PLL) over the ownership and operation of the LNG Services Infrastructure (Terminal) at Port Qasim, Karachi.
The London Court of International Arbitration ruled that PLL had no right to terminate the Operation and Services Agreement signed in 2016 and declared the Termination Notice issued by PLL in 2019 as void and illegal. As a result, PGPC will continue to own, manage, control, and operate the Terminal.
The Tribunal also directed PLL to provide PGPC with a Stand-by Letter of Credit for US$21,481,272 as per the OSA. The Tribunal rejected PLL’s claim for liquidated damages of US$41.1 million for the delay in commissioning of the Terminal and instead imposed liquidated damages of US$7.2 million on PGPC for the 33-day delay.
PGPC has received 237 LNG vessels for regasification and delivered over 700 billion cubic feet of gas to help alleviate Pakistan’s gas shortage since the Terminal became operational five years ago. The company is currently exploring its legal options in relation to the imposition of liquidated damages. The Tribunal declined to decide PGPC’s claims for royalty and services provided before commissioning of the Terminal, stating that they must first be considered by the Parties’ Authorised Representatives before being referred to arbitration.
The award is a significant victory for PGPC and ensures that it can continue to serve the people of Pakistan.
