The Competition Commission of Pakistan (CCP) has granted approval until December 2025 on the LNG supply chain component of the Share Purchase Agreement (SPA) signed between M/s Diamond Gas International Japan Co. Ltd and M/s Bison Energy FZCO. Diamond Gas International, a Tokyo-based company, is a wholly owned subsidiary of Mitsubishi Corporation with specialization in marketing, trading and shipping of LNG. Presently, it holds 100% share in two companies established in Pakistan, named Tabeer Energy (Pvt) Limited (TEPL) and Tabeer Energy Marketing (Pvt) Limited (TEMPL). Both entities have been licensed by OGRA for construction of LNG terminal and for sale of Gas in Pakistan, respectively. Meanwhile, Bison Energy FZCO, a UAE-based energy developer and investor with portfolios in Europe, Eastern-Asia and Australia is acquiring both TEPL and TEMPL. An SPA has been signed between Diamond Gas and Bison Energy in December 2023 for sale/purchase of shares of TEPL and TEMPL. Now, Mitsubishi intends to continue to be part of Pakistan’s LNG supply chain after the selling of shares of TEPL and TEMPL to Bison Energy. In terms of the SPA, Bison Energy has granted the right to Diamond Gas International to be part of procurement process for supply of LNG post acquisition of TEPL and TEMPL. The CCP, while granting the exemption, has included conditions that inter alia include transparency and fair competition to be ensured in the LNG procurement process by both Diamond Gas and Bison Energy with adequate disclosures made in the LNG bidding documents on existence of the referred arrangement. The CCP has also specified that in case of any change in the regulatory regime for TEPL and TEMPL or change in the pipeline capacity allocation for new LNG terminal by Cabinet Committee on Energy (CCoE) on 8 Oct 2021 and later by Federal Cabinet on 27 Oct 2021, the matter will be subject to CCP’s review to access the implications, if any, in the relevant market. Moreover, this exemption granted does not entail any approval on down-stream commercial agreements in LNG supply chain as those are distinct from this arrangement approved by CCP. While allowing time-bound exemption along with conditions therein, CCP aims to facilitate ‘relevant market’ to have more certainty in LNG supply chain with an international group like Mitsubishi Corporation be part of process to match and quote best rates for LNG supply in Pakistan. Mitsubishi Corporation is engaged in large-scale investment in LNG infrastructure and is a shareholder in 12 LNG producing projects globally with an annual production of around 12.12 Million Tonnes Per Annum. The CCP grants exemption under Section 9 of the Competition Act, 2010, ensuring that such exemption offers and translates into economic benefits that outweigh any anti-competitive effects besides promoting technical and economic progress. It is envisaged that this exemption will further pave the way for future foreign direct investment with opportunities of ease of doing business for an undertaking that intend to be part of Pakistan’s economic growth trajectory. Besides, it is expected that the technical and commercial growth of Pakistan’s energy sector will broaden under the referred arrangement with venues opened for B2B arrangements and agreements downstream the LNG/gas supply chain in Pakistan.
The Competition Commission of Pakistan (CCP) has granted approval until December 2025 on the LNG supply chain component of the Share Purchase Agreement (SPA) signed between M/s Diamond Gas International Japan Co. Ltd and M/s Bison Energy FZCO.
Diamond Gas International, a Tokyo-based company, is a wholly owned subsidiary of Mitsubishi Corporation with specialization in marketing, trading and shipping of LNG. Presently, it holds 100% share in two companies established in Pakistan, named Tabeer Energy (Pvt) Limited (TEPL) and Tabeer Energy Marketing (Pvt) Limited (TEMPL). Both entities have been licensed by OGRA for construction of LNG terminal and for sale of Gas in Pakistan, respectively. Meanwhile, Bison Energy FZCO, a UAE-based energy developer and investor with portfolios in Europe, Eastern-Asia and Australia is acquiring both TEPL and TEMPL.
An SPA has been signed between Diamond Gas and Bison Energy in December 2023 for sale/purchase of shares of TEPL and TEMPL. Now, Mitsubishi intends to continue to be part of Pakistan’s LNG supply chain after the selling of shares of TEPL and TEMPL to Bison Energy.
In terms of the SPA, Bison Energy has granted the right to Diamond Gas International to be part of procurement process for supply of LNG post acquisition of TEPL and TEMPL. The CCP, while granting the exemption, has included conditions that inter alia include transparency and fair competition to be ensured in the LNG procurement process by both Diamond Gas and Bison Energy with adequate disclosures made in the LNG bidding documents on existence of the referred arrangement. The CCP has also specified that in case of any change in the regulatory regime for TEPL and TEMPL or change in the pipeline capacity allocation for new LNG terminal by Cabinet Committee on Energy (CCoE) on 8 Oct 2021 and later by Federal Cabinet on 27 Oct 2021, the matter will be subject to CCP’s review to access the implications, if any, in the relevant market. Moreover, this exemption granted does not entail any approval on down-stream commercial agreements in LNG supply chain as those are distinct from this arrangement approved by CCP.
While allowing time-bound exemption along with conditions therein, CCP aims to facilitate ‘relevant market’ to have more certainty in LNG supply chain with an international group like Mitsubishi Corporation be part of process to match and quote best rates for LNG supply in Pakistan. Mitsubishi Corporation is engaged in large-scale investment in LNG infrastructure and is a shareholder in 12 LNG producing projects globally with an annual production of around 12.12 Million Tonnes Per Annum.
The CCP grants exemption under Section 9 of the Competition Act, 2010, ensuring that such exemption offers and translates into economic benefits that outweigh any anti-competitive effects besides promoting technical and economic progress. It is envisaged that this exemption will further pave the way for future foreign direct investment with opportunities of ease of doing business for an undertaking that intend to be part of Pakistan’s economic growth trajectory. Besides, it is expected that the technical and commercial growth of Pakistan’s energy sector will broaden under the referred arrangement with venues opened for B2B arrangements and agreements downstream the LNG/gas supply chain in Pakistan.
© CCP 2024, Competition Commission of Pakistan ©All rights reserved
