Gas utilities facing supply issues

Published
0
Gas utilities are said to have expressed concerns over supply issues in the existing pipeline network based on the government’s plan for providing gas to new domestic consumers and other sectors. — Reuters/File
Gas utilities are said to have expressed concerns over supply issues in the existing pipeline network based on the government’s plan for providing gas to new domestic consumers and other sectors. — Reuters/File

ISLAMABAD: After constitution of a committee on construction of new Liquefied Natural Gas (LNG) terminals, the gas utilities are said to have expressed concerns over supply issues in the existing pipeline network based on the government’s plan for providing gas to new domestic consumers and other sectors.

Last week, a meeting at the Ministry of Maritime Affairs constituted a six-member committee, comprising directors general of the petroleum division and managing directors of the Sui Southern Gas Company Limited (SSGCL) and Sui Northern Gas Pipelines Limited (SNGPL), to address challenges faced by the two upcoming terminals.

A top official in the petroleum division said the two gas utilities, particularly the SNGPL, had continuously been protesting over allocation of 150 million cubic feet per day (mmcfd) to private power utility K-Electric on ‘take or pay’ basis while depriving it of an existing, similar arrangement with three public sector LNG-based power plants in Punjab through a decision of the cabinet committee on energy.

The official said the SNGPL had put on record that while it was obligated under the orders of federal government and determinations of the Oil and Gas Regulatory Authority to provide about 3.7 million new gas connections in three years, its gas supplies and terminal and transmission pipeline capacities were being curtailed again by the government itself.

Records showed that some attempts were made to build a direct pipeline from one of the existing LNG terminals to the KE’s upcoming power plant of 900MW at Bin Qasim so that Pakistan LNG Limited (PLL) could deliver 150mmcfd gas to the power utility.

However, SSGCL had to intervene to secure its rights and act as a buffer through its distribution system. The SSGCL had explained to the top authorities in Islamabad that a direct connection from the terminal would have operational issues and heavy demurrage would accrue as the power utility would not be consuming the total allocated volume at all times.

The officials said the SSGCL and SNGPL had also initialled the gas transportation agreement for 1,200mmcfd of RLNG which meant that the entire existing transmission pipeline capacity between the two utilities stood confirmed.

At the same time, the SNGPL and PLL had finalised a gas sale-purchase agreement for 600mmcfd capacity from second terminal as the Lahore-based gas company had firm commitments of 1,100-1,200mmcfd for up to eight months a year with power, fertiliser, CNG sectors besides the growing demand in the residential sector. This is happening at a time when the domestic gas production is declining by about 100mmcfd per year.

The petroleum division official said the gas utilities’ voice could not reach the prime minister, the federal cabinet or even the planning minister, adding that the previous hierarchy of the division was unable to defend the rights of gas utilities.

Published in Dawn, April 5th, 2021

Follow Dawn Business on X, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Muddled hierarchy
Updated 15 Nov, 2026

Muddled hierarchy

The jurisdiction of the two courts and a mechanism for settling disputes between them should be spelt out in law, not left to judges to fight over.
Growing crisis
Updated 15 Nov, 2026

Growing crisis

Calling population growth a national emergency is easy. Ensuring that the response reaches the people who need it is the real challenge.
Organised rackets
15 Nov, 2026

Organised rackets

ON the International Day against Transnational Organised Crime, observed today, Pakistan finds itself in a tight...
Referendum talk
Updated 14 Nov, 2026

Referendum talk

Unless the PPP is deliberately using Sindh as a bargaining chip, it should issue a clarification with a clear, consistent position on new administrative units, not one tailored to protect its home turf.
Mineral wealth
Updated 14 Nov, 2026

Mineral wealth

Minerals should not be presented as a solution to Pakistan’s long-term economic difficulties. The aim should be to build an industrial base rather than export raw materials.
Late diagnosis
14 Nov, 2026

Late diagnosis

AS we mark World Diabetes Day today, Pakistan faces a troubling question: how many people are living with diabetes...