ISLAMABAD: Around 275 million cubic feet per day (mmcfd) of natural gas is still being provided to cement, fertiliser and power plants although domestic consumers continue to suffer, particularly in Punjab and some parts of Khyber-Pakhtunkhwa.

A senior official of the petroleum ministry told Dawn that natural gas currently being supplied to some of the non-domestic sectors was without formal contracts. At least 275mmcfd gas being supplied to customers other than residential consumers accounted for 600mmcfd of total gas availability in the Punjab.

The supplies of liquefied natural gas (LNG) have also been curtailed in recent days because of liquidity crunch even though the regasification and storage terminal was installed in March last year with prime objective of minimising gas shortfall in winter — starting November 2015.

He said the terminal had the capacity to process 400mmcfd under the government contract but LNG imports had been reduced despite lowest prices in the spot market.

The government should not only increase LNG imports to take advantage of its low prices, but also negotiate with Qatargas to put an upper cap on its import price because of a long-term agreement.

Giving an example, the official said Rousch Power Plant was currently being supplied about 86mmcfd of gas despite the fact that the plant did not have any gas supply contract at the moment. Likewise, Fauji Kabirwala Plant was also getting 25mmcfd and public sector Guddu plant was being provided 23mmcfd.

Another 81mmcfd of natural gas was also being provided to Jamshoro Power plant, followed by 29mmcfd to Kotri Power Plant. Fauji Jordan Fertiliser plant was also being provided 19mmcfd. The official said Pak-Arab Fertiliser was also being provided about 43mmcfd of natural gas until last week but was later disconnected when it was highlighted in the media.

About 11mmcfd gas in Sui Northern Gas Pipelines Limited (SNGPL) was also going to the cement sector which is at the lowest level of the priority list.

This include 5.5mmcfd to Lucky Cement, 2.5mmcfd to two plants of DG Khan in Kalar Kahar and Multan, one mmcfd to Kohat Cement and two mmcfd to Gharibwal Cement.

Under the load management policy, domestic consumers are on the top priority, followed by power, fertiliser, industry, CNG and then cement. Because of historic fall in international oil prices, the cost of regasified LNG (RLNG) after all the taxes and charges has fallen below $5.5 per mmbtu which is well below the price of some of the domestic gas fields.

RLNG price has become affordable to domestic sector at this rate if made part of the weighted average cost of gas at least for three months.

On the other hand, the SNGPL has appealed to all consumers to minimise use of gas appliances to ensure provision of gas for cooking purposes only for fellow consumers and avoid using gas compressors and heaters which could be life threatening.

The company said the demand supply position on its system had deteriorated over the last few years due to the impact of new domestic connections involving additional 80-100mmcfd annually during winter months against 160mmcfd reduction in supplies every year.

“Thus each year, SNGPL faces an additional shortfall of 250mmcfd,” the SNGPL said.

It said the shortfall was bridged though load management (curtailment) in different sectors to cater for high priority domestic and commercial sectors in accordance with Natural Gas Allocation and Management Policy, 2005 and its subsequent amendments.

“Due to the decision of Peshawar High Court against a writ petition invoking Article-158 of the constitution, there is no curtailment in Khyber Pakhtunkhwa,” a company spokesperson explained.

During the current winter season, SNGPL was left with no option but to curtail total system quality gas supplies to all sectors in Punjab other than domestic and commercial consumers, the spokespersons claimed.

Even with the said suspension, the gas available for Punjab is not sufficient to meet the demand of domestic and commercial sectors in extreme winters (around 1,000 mmcfd).

Commenting on gas supply to non-entitled sectors, the SNGPL said some sectors continue to get gas even during winter months like power and fertiliser which are supplied raw, permeate or low BTU gas, which is not fit for supply to other sectors through SNGPL’s pipeline network. These dedicated supplies typically range from 180 to 240mmcfd. Further, SNGPL is bound to supply 15mmcfd system quality gas to Engro Fertilisers, under firm commitment.

Additionally, cement sector is being supplied around 12mmcfd, out of which, around 7-8mmcfd is supplied to the plants located in the provinces of Khyber Pakhtunkhwa. Remaining 4-5mmcfd is mainly supplied to residential colonies of cement plants in Punjab since the same fall under domestic consumers.

Some consumers have opted for supplies of Re-gasified LNG (RLNG). Rousch, Fauji Kabirwal, Kot Addu, Saif, Sapphire, Orient and Halmore from the power sector, Pak-Arab from fertiliser sectors and a large number of consumers from industrial and CNG sectors have opted for RLNG supplies and are being supplied RLNG on as available basis.

This shift has contributed to reduction in the overall demand supply gap of natural gas. Domestic sector is not being supplied RLNG due to its heavy cost component.

He said total gas available for supply in the Punjab was around 600mmcfd and diversion of gas from non-entitled sectors as per government’s approved and published load management policy could make a lot of difference in easing sufferings of the people.

Published in Dawn, February 4th, 2016

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