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Home / Business / Rs488/mmbtu instead of Rs123: Tuwairqi Steel to invest $900m, Qaim to resolve gas tariff
Rs488/mmbtu instead of Rs123: Tuwairqi Steel to invest $900m, Qaim to resolve gas tariff

Rs488/mmbtu instead of Rs123: Tuwairqi Steel to invest $900m, Qaim to resolve gas tariff

ISLAMABAD: Tuwairqi Steel Mills Ltd (TSML) Chairman Dr Hilal Hussain Al-Tuwairqi has said if the government does not reduce gas tariff the company will have to leave the country.

On the other hand, Sindh Chief Minister Syed Qaim Ali Shah has agreed with Ambassador of the Republic of South Korea Song Jong-hwan to take up the matter of providing gas at the concessionary rate to Pakistan’s largest steel complex in private sector Tuwairqi Steel Mills being operated under the joint venture between Saudi Arabia’s Al Tuwairqi Group of Companies and South Korea’s Phong Steel at Karachi to the Federal government for settlement.  This he agreed, on the request of the Ambassador of Republic South Korea Dr. Song Jong-hwan who called on him at CM House here on Thursday.
While talking in the meeting Dr. Song Jong-hwan informed the Chief Minister that previous governments in Pakistan had made the commitment for providing gas at concessionary rate to the Tuwairqi steel but now federal government doesn’t response to the management in this regard. He said that Al Tuwairqi has planned to make further investment of $900 million in the next phases of this mill, if gas is supplied at concessionary rate.

Tuwairqi Steel Mills Ltd (TSML) Chairman Dr Hilal Hussain Al-Tuwairqi, addressing a press conference the other day, said that the government should provide gas to the company as per the memorandum of understanding (MoU) signed in 2004. He said if the issued is not solved in next meeting of the Economic Coordination Committee (ECC) of the Cabinet, they will have to leave the country and the government should take this press conference as the official message.

The TSML, a joint venture of Saudi Arabia’s Al-Tuwairqi Group of Companies and South Korea’s Pohang Iron and Steel Company (Posco), has production capacity of 1.28 million tonnes a year.

The Ministry of Industries worked out in July 2014 that the gas feedstock tariff for the TSML should be Rs123 per million British thermal units (mmbtu) based on an MoU signed by the government of Pakistan in 2004. However, the government was offering gas at Rs488 per mmbtu to the company.

TSML Country Head Zaigham Adil Rizvi said the impact on national exchequer would be less than Rs4 billion if the government agrees to give gas at Rs123 per mmbtu. “On the other hand, the government will draw around Rs4 billion a year in taxes if we continue production, besides other gains such as jobs, reduced import of steel, etc.”

POSCO’s Senior Executive Vice-President and In-charge Overseas Investments Hong-Soo Kim was also present at the press conference.