Gas crisis deepens as supply to industries, CNG outlets halted

Published June 29, 2021
The gas crisis has deepened across the country as two state-owned companies on Monday announced complete closure of gas supply till July 5 to industries and CNG stations. — Reuters/File
The gas crisis has deepened across the country as two state-owned companies on Monday announced complete closure of gas supply till July 5 to industries and CNG stations. — Reuters/File

KARACHI/LAHORE: The gas crisis has deepened across the country as two state-owned companies on Monday announced complete closure of gas supply till July 5 to industries and CNG stations following a decline in gas availability, low pressure in the system and dry docking of LNG terminal.

CNG stations in Sindh were to open from June 28 after the closure on June 22, but Sui Southern Gas Company Limited (SSGCL) stopped supplies to them till July 5 in view of the lingering shortfall of 160mmcfd due to annual turnaround of Kunnar Pasakhi Deep (KPD) gas field, causing a decline in gas availability and resulting in depletion of line pack and low pressure in the system.

Sui Northern Gas Pipelines Limited (SNGPL) completely stopped gas supply to three sectors — cement, CNG (compressed natural gas) stations and non-export industry — in Punjab and Khyber Pakhtunkhwa till July 5 due to dry docking of LNG terminal.

Energy Minister Hammad Azhar had told a private news channel the other day that the government would cover the gas shortfall for power generation caused by dry docking of the Engro RLNG terminal by cutting supplies to the industries and CNG sector and diverting system gas to power plants.

Stakeholders blame poor management, bad decision-making for shortage

Stakeholders at a press conference held at the head office of Federation of Pakistan Chambers of Commerce and Industry (FPCCI) in Karachi on Monday blamed poor management, bad decision-making and lack of vision of the government for the crisis.

FPCCI president Mian Nasser Hyatt Magoo said the crisis would cause huge losses to the business community and the public alike, affecting businesses and reducing production and exports. He said sales tax on LNG for the CNG sector had been increased from five per cent to 17pc, besides imposition of 5pc customs duty. This decision should be reversed immediately, he demanded.

The FPCCI chief said the entire country was in the grip of energy emergency due to the badly-timed import of LNG, adding that it was the worst time to go for yearly repair and maintenance of the LNG terminal. He said that neither the government had imported gas itself nor allowed the CNG sector to do so.

Mr Magoo said the nationwide gas suspension was unacceptable as it would take its toll on the masses, industry and the CNG sector.

All Pakistan CNG Association leader Ghiyas Abdullah Paracha said policies of the energy sector were not in line with the ground realities. The crisis would continue until the CNG sector is allowed to import its own gas. “If we import our own gas, loadshedding will end and the government will generate Rs82 billion, but this is not acceptable to a few bureaucrats,” he said.

Mr Paracha said the CNG sector in Punjab and Sindh were using imported gas and it had nothing to do with the reduction in domestic gas production nor did it have any justification to cut off gas.

All Pakistan CNG Association chairman Khalid Latif said Rs450bn had been invested in the CNG sector, but the future is bleak and hundreds of thousands of workers have been displaced from the CNG sector.

SSGCL had last week completely suspended gas supply to non-export industries, followed by 50pc cut in supply to captive power units. SSGCL spokesman Safdar Hussain said the decision had been reversed and now 50pc gas supply had resumed from Monday to export industries, followed by 100pc stoppage of gas to captive power units.

Businessmen Group chairman Zubair Motiwalla said it was true that SSCGL had reversed the decision, but it had no importance as there was no gas as the pressure is either half psi or one psi which was insufficient to run production activities. “The industries can run on five psi of gas pressure,” he said, adding that usually industries had been receiving 8psi of pressure in normal days.

Gas suspension in Punjab, KP

Since gas supply to two major consumers in the fertiliser sector — M/s Agritech and Fatima Fertiliser — would also remain suspended till July 5, SNGPL termed dry docking activities at the LNG terminal unplanned ones.

“The re-gasification from EETPL (Terminal-1) shall be disrupted during the period — from June 29 to July 5 — due to unplanned dry docking activities. Therefore, in order to manage gas loads during the period and pursuant to the minutes of the meeting of June 9, the gas/RLNG supply to CNG, cement and non-export industrial sectors across the franchised area of SNGPL (including Punjab and KP), as decided in the consultative meetings with the ministry would remain suspended,” read an internal memorandum circulated to the senior officials concerned on Monday.

“It is pertinent to mention that the physical disconnection of all consumers is critical, otherwise the impact of curtailment will be marginalised,” it stated.

According to an official, dry docking activities at the terminal are actually two days. “But resumption of gas supplies will take 6/7 days, including two-day dry docking period, as it involves various activities — starting operation of the terminal, re-gasification process, maintaining required pressure and injecting gas to the pipelines/system for onwards supplies to various sectors,” he said.

The official said that at present SNGPL was facing over 600mmcfd of RLNG due to maintenance of the terminal. However, the company is receiving around 850mmcfd of system (indigenous) gas from various gas fields and 600mmcfd of RLNG through LNG terminal-2.

He said the company at present had gas as per demand of domestic, zero-rated export industry and the sectors other than cement, CNG, non-export industry and two major consumers — Agritech and Fatima Fertilizers.

Talking to Dawn, SNGPL managing director Ali J Hamdani termed the shortage temporary, claiming it would improve soon. “We had an extensive meeting with the government on Monday. And we all were agreed that the shortage is for some days and soon the situation would improve,” he added. He said there would also be no gas shortage in July.

Published in Dawn, June 29th, 2021

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