A rare breed in politics: Unbelievable stories of Shahid Abbasi coming out of NAB detention

[niaz]

You are a credible person and also a field expert. But this is strange to me that whenever I review newspapers like Jang and News and see channels like Geo, PMLN government looks like the savor of the nation and it appears like we were living in a paradise. In reality, when I look at the actual situation on the ground there is not a single deal involving any government institutes that happens without money or power.

I am not talking about individual cases but tell me what should I believe as a citizen of Pakistan? Investigation reports or affairs happening in front of my own eyes?

Honorable Accountant,

One should never believe everything that one hears in the media. What I can say (up to you to decide whether true or not) is that after watching the Duyna News TV discussion about LNG about a year or so back, I was extremely disappointed. Mr. Rauf Klasra claimed that it was estimated by a GOP study that the LNG regasification terminal would cost Rs 3-billion but it actually cost Rs 13-billion, implying that Rs 10-billion was misappropriated by Shahid Khaqan Abbasi and the Engro terminal team. I sent e-mail aksing Mr. Rauf Klasra to give me the contact of the person who can build even a small LNG receiving terminal for Rs3-billion ( $30-million at 100 Rs =1-US dollar which was the rate then), he did not reply. I also sent an email to Dunya News providing all the data asserting that Mr. Rauf Klasra was either ignorant of the LNG Industry or was deliberately misleading the Pakistan public, however, Dunya News did not reply either.

I cannot say for sure how much of the analysis on TV by so-called investigative journalists and self-appointed experts is correct. However, since energy/petroleum is the field where I spent most of my working life; I know that Mr. Rauf Klasra was talking non-sense when he was giving details of how much money was siphoned off in the construction of the LNG terminal. Since the rest of the experts on the panel and the audience know even less than My Klasra, he was able to impress all by his totally incorrect set of numbers.

I have personally worked on the feasibility of a 6-million ton LNG re-gasification terminal at Jeddah a few years ago and since you have cast doubts on the accuracy of my post, and you are called Accountant, kindly permit me to reply with some numbers.

I have now retired and I don’t have the Technical Literature of the LNG re-gasification and costs associated with it. I had to resort to surfing the Internet to get some relevant info and here it is:

Australia China Natural Gas Technology Partnership Fund carried out a study to decide whether to go for a land-based terminal or for a floating storage and regasification unit (FSRU) which was to be built in China. The study was published on October 26, 2017, as “COMPARATIVE RESEARCH ON LNG RECEIVING TERMINALS AND FSRU.”

https://www.jtsi.wa.gov.au/docs/def...iving-terminals-and-fsru.pdf?sfvrsn=9266d1c_8

Engro terminal in question is also an FSRU. Since the Engro terminal was also being built at that time, the prices of various units for the FSRU are comparable. The only difference is that the study was for a terminal of 3 million tons per annum capacity whereas Engro terminal capacity is 600-million cft per day which equals about 4.2-million tons per annum, hence about 40% larger.

On page 14 of this study under the heading “3.1 CAPEX COMPARISON,” the study gives the cost break down as under.

The capital cost of jetty $60-million, FSRU vessel $250-million, onshore infra-structure $30-million, land & other costs $20-million making a total Capital outlay of $360-million. At 1US$ = Pk Rs 100 this equates to 36-billion Pk Rupees.

In the same study on page 15 cost of operating at the FRSU terminal is given between $20,000 to $45,000 per day. In my own work, the operating expense was found to be divided roughly 50/50 between the vessel and onshore facilities.

Engro did not buy the vessel, instead ‘Rented’ an FSRU vessel at $272,000 per day which includes all the vessel running costs. Since the Engro terminal is 40% larger, let us assume that vessel running cost (salaries of the crew & operating staff and fuel cost) is about $20,000 per day.

This leaves $252 K per day as rental of the vessel. The Engro vessel being nearly 50% larger, would cost more than $250-million, as a guestimate let us assume $300-million. It means that the owners are getting nearly 30% ROI. The banks would probably charge about 4% on the loan; therefore the owners of the vessel are enjoying close to a 25% return on their equity.

Onshore facilities' capital cost mentioned in the study is $110-million, equal to Pk Rs 11-billion. However, since the storage tanks, pipeline and most of the jetty would have been built locally in China, whereas all the hardware would be imported for Pakistan, it would include shipping costs as well and thus would cost more.

Besides, Karachi terminal is also larger, hence Pk Rs 13-billion for the land-based facilities, appears to about right. One can argue that FSRU vessel could have been rented at a lower rate but tender and somehow poorer countries always end up paying more because the investors include a ‘Risk’ factor in their economics.

I have given a link to the study so that doubters can cheque for themselves. Additionally, the new proposed terminal by ExxonMobil is also expected to cost between $140-$160-million (13-billion to 16-billion rupees at the old conversion rate but 21-billion to 32-billion at the current rate)

https://www.hellenicshippingnews.co...g-terminal-plans-2021-start-as-demand-surges/

Pray tell me, is it possible to skim off billions of rupees from this project as Rauf Klasra has claimed? (And that is also probably why Shahid Khaqan Abbasi has not yet been charged)

Regret to say that just like the missing $200-billion supposedly stashed away abroad by Pakistanis; most of the figures one hears in the media are highly exaggerated and primarily only meant to grab the headlines. Personally, after this LNG terminal case, I would not believe a word of Rauf Klasra even if he swears it on his mother's life.

 

[The Accountant]

Honorable Accountant,

One should never believe everything that one hears in the media. What I can say (up to you to decide whether true or not) is that after watching the Duyna News TV discussion about LNG about a year or so back, I was extremely disappointed. Mr. Rauf Klasra claimed that it was estimated by a GOP study that the LNG regasification terminal would cost Rs 3-billion but it actually cost Rs 13-billion, implying that Rs 10-billion was misappropriated by Shahid Khaqan Abbasi and the Engro terminal team. I sent e-mail aksing Mr. Rauf Klasra to give me the contact of the person who can build even a small LNG receiving terminal for Rs3-billion ( $30-million at 100 Rs =1-US dollar which was the rate then), he did not reply. I also sent an email to Dunya News providing all the data asserting that Mr. Rauf Klasra was either ignorant of the LNG Industry or was deliberately misleading the Pakistan public, however, Dunya News did not reply either.

I cannot say for sure how much of the analysis on TV by so-called investigative journalists and self-appointed experts is correct. However, since energy/petroleum is the field where I spent most of my working life; I know that Mr. Rauf Klasra was talking non-sense when he was giving details of how much money was siphoned off in the construction of the LNG terminal. Since the rest of the experts on the panel and the audience know even less than My Klasra, he was able to impress all by his totally incorrect set of numbers.

I have personally worked on the feasibility of a 6-million ton LNG re-gasification terminal at Jeddah a few years ago and since you have cast doubts on the accuracy of my post, and you are called Accountant, kindly permit me to reply with some numbers.

I have now retired and I don’t have the Technical Literature of the LNG re-gasification and costs associated with it. I had to resort to surfing the Internet to get some relevant info and here it is:

Australia China Natural Gas Technology Partnership Fund carried out a study to decide whether to go for a land-based terminal or for a floating storage and regasification unit (FSRU) which was to be built in China. The study was published on October 26, 2017, as “COMPARATIVE RESEARCH ON LNG RECEIVING TERMINALS AND FSRU.”

https://www.jtsi.wa.gov.au/docs/def...iving-terminals-and-fsru.pdf?sfvrsn=9266d1c_8

Engro terminal in question is also an FSRU. Since the Engro terminal was also being built at that time, the prices of various units for the FSRU are comparable. The only difference is that the study was for a terminal of 3 million tons per annum capacity whereas Engro terminal capacity is 600-million cft per day which equals about 4.2-million tons per annum, hence about 40% larger.

On page 14 of this study under the heading “3.1 CAPEX COMPARISON,” the study gives the cost break down as under.

The capital cost of jetty $60-million, FSRU vessel $250-million, onshore infra-structure $30-million, land & other costs $20-million making a total Capital outlay of $360-million. At 1US$ = Pk Rs 100 this equates to 36-billion Pk Rupees.

In the same study on page 15 cost of operating at the FRSU terminal is given between $20,000 to $45,000 per day. In my own work, the operating expense was found to be divided roughly 50/50 between the vessel and onshore facilities.

Engro did not buy the vessel, instead ‘Rented’ an FSRU vessel at $272,000 per day which includes all the vessel running costs. Since the Engro terminal is 40% larger, let us assume that vessel running cost (salaries of the crew & operating staff and fuel cost) is about $20,000 per day.

This leaves $252 K per day as rental of the vessel. The Engro vessel being nearly 50% larger, would cost more than $250-million, as a guestimate let us assume $300-million. It means that the owners are getting nearly 30% ROI. The banks would probably charge about 4% on the loan; therefore the owners of the vessel are enjoying close to a 25% return on their equity.

Onshore facilities' capital cost mentioned in the study is $110-million, equal to Pk Rs 11-billion. However, since the storage tanks, pipeline and most of the jetty would have been built locally in China, whereas all the hardware would be imported for Pakistan, it would include shipping costs as well and thus would cost more.

Besides, Karachi terminal is also larger, hence Pk Rs 13-billion for the land-based facilities, appears to about right. One can argue that FSRU vessel could have been rented at a lower rate but tender and somehow poorer countries always end up paying more because the investors include a ‘Risk’ factor in their economics.

I have given a link to the study so that doubters can cheque for themselves. Additionally, the new proposed terminal by ExxonMobil is also expected to cost between $140-$160-million (13-billion to 16-billion rupees at the old conversion rate but 21-billion to 32-billion at the current rate)

https://www.hellenicshippingnews.co...g-terminal-plans-2021-start-as-demand-surges/

Pray tell me, is it possible to skim off billions of rupees from this project as Rauf Klasra has claimed? (And that is also probably why Shahid Khaqan Abbasi has not yet been charged)

Regret to say that just like the missing $200-billion supposedly stashed away abroad by Pakistanis; most of the figures one hears in the media are highly exaggerated and primarily only meant to grab the headlines. Personally, after this LNG terminal case, I would not believe a word of Rauf Klasra even if he swears it on his mother's life.

First of all I never intend to doubt your credibility. You are one of the member here, for whom I have nothing but respect. Let me clarify my point.

First of all my post was generic in nature and was not about this particular project. The data shared by you obviously indicate that the regasification project of Engro is a fair deal. Beside your assurance name of Engro itself is a big assurance that project is clean.

Furthermore, Rauf Klasra investigative journalism should better be called speculative at best.

However, my query was generic in nature highlighting the point that as per some people everything was running smoothly in Pakistan and there was no corruption whereas some people think that everything and everyone is corrupt. Reality lies something in between these 2 extreme views.

As OP was giving an impression that everything about Shahid Khaqan Abbasi and all other government people is clean and he has done everything at lowest rates ever used in the world. My view is that he might be right in this particular case but murder of merit and corruption is a wide spread issue even with the current government. THe issue is our inability to prove it.