PESHAWAR: The provision of gas to thousands of households in the oil and gas producing districts of the province will cost the Khyber Pakhtunkhwa government and Sui Northern Gas Pipelines (SNGPL) about Rs9.03 billion.

The provincial cabinet had earlier in April approved a summary to provide funds for the gas supply to households in the gas producing southern districts of the province including Karak, Hangu and Kohat as non-provision of gas to locals was leading to the gas theft in the region, causing heavy losses to SNGPL.

Documents available with Dawn show that a meeting was held with Chief Minister Mahmood Khan in the chair earlier in November 2018 wherein it was decided that SNGPL would conduct a survey of the localities falling in the oil and gas producing districts of the province and formulate a comprehensive project, covering costs of rehabilitation of existing pipelines, upgradation of sales metering stations and laying of new pipelines for gasification of these districts.

Facility to be provided to 70,883 households in gas producing areas

The documents state that SNGPL had submitted a detailed survey report of 61,913 households in three districts that was revised following suggestions from the provincial government and the revision led to increase the number of households to 70,883, which would be provided with the gas facility.

The extension of gas supply to these households would cost the provincial government and SNGPL together up to Rs9.03 billion.

The document said that according to consumer quota of Khyber Pakhtunkhwa, per consumer cost of Rs108,000 would be borne by the gas utility and SNGPL and the total share came closer to Rs4.668 billion. On the other hand, the provincial government would provide funds amounting to Rs4.371 billion from the royalty share of the oil and gas producing districts.

It said that proposal of funding the expansion of domestic gas consumer network was in line with the recommendations of the task force constituted to revise policy for the utilisation of oil and gas in Kohat division.

The provincial government has been diverting 10 per cent of its oil and gas receipts known as straight transfers to oil and gas producing districts of Karak, Hangu and Kohat for improving social sector development.

The document said that SNGPL had asked the provincial government to make commit security services from Khyber Pakhtunkwa as per clause-19 of the Gas (Theft Control and Recovery) Act, 2016.

The gas utility has also asked the provincial government to provide its administrative support to it and ensure that recurrence of gas theft will be eliminated besides helping in approval of project form the boards of directors of SNGPL and Oil and Gas Regulatory Authority.

The document said that the provincial government was asked to release to Rs1.09 billion from royalty fund to SNGPL to start the execution project while the remaining amount would

be released to the gas utility on full utilisation of previous installment supported by receipts of bill of quantities, duly verified by the district administration.

“In order to curb the menace of theft of natural gas in the gas producing districts, the finance department has agreed to release Rs354 million for the current financial year out of Khyber Pakhtunkhwa’s share subject to the approval of co-financing by the federal government for the subject scheme,” said the document.

Published in Dawn, May 13th, 2019