Gas supply to CNG sector will be curtailed: CCoE

Published November 19, 2021
A statement on the Cabinet Committee on Energy meeting says industrial activity will be the focus of gas management plans, especially in the export sector. — Dawn/File
A statement on the Cabinet Committee on Energy meeting says industrial activity will be the focus of gas management plans, especially in the export sector. — Dawn/File

ISLAMABAD: With shortage of natural gas estimated at 600 million cubic feet per day next month and 800mmcd in January, the Cabinet Committee on Energy (CCoE) could not finalise gas load management plan for the winter season on Thursday, but announced that supplies would be curtailed to transport sector.

The meeting, presided over by Mini­ster for Planning and Develop­ment Asad Umar, however, decided that the government would “ensure stable supply of gas to consumers” through yet-to-be-developed “prudent pressure management plan”, said an official statement. “Gas supply to CNG (sector) will be curtailed during the winter,” it added.

The statement said that industrial activity would be the focus of gas management plans, especially in the export sector, with the petroleum division informing the meeting that enhanced demand for domestic consumers would be met through savings from captive power plants.

The CCoE said it had approved the demand side of the proposals, but the supply side options would be discussed in its next meeting.

Says stable supply to be ensured to consumers

An official, however, said that even the demand side proposals agreed to by the CCoE were tentative in nature, in the absence of arrangements on the supply side where there was limited scope for adjustments, other than rationing among various sectors. This too would remain uncertain and would depend on the severity of the weather.

Officials of the petroleum division made a presentation on the projected gas supply and demand position for the coming winter based on detailed analysis of impacts of different policy options.

The Sui Northern Gas Pipelines Limited (SNGPL) presented a segment-wise gas curtailment plan, which showed the fertiliser sector would be the only one that would continue getting 86mmcd of gas both in December and January.

Gas supply adjustments in the domestic and commercial sectors through LNG diversion would cost more than Rs92 billion in three months — Rs27bn in December, Rs42bn in January and 23bn in February.

This would be on top of the Rs102bn cost arising out of RLNG diversions so far. The total cost of RLNG diversions would thus work out to Rs195bn in the fiscal year 2021-22.

The plan showed that total supply in the SNGPL network would be 1,574mmcfd and load curtailment was estimated at 600mmcfd in December. The supplies would almost remain unchanged at 1,579mmcfd in January but gas curtailment would touch 800mmcfd.

This would mean that power sector would get 250mmcfd and face curtailment of 225mmcfd in December. However, supplies to the power sector would drop to 225mmcfd in January and curtailment would go beyond 285mmcfd.

General industry would get about 170mmcfd in December against curtailment of 165mmfcd. The situation would aggravate in January as supplies would drop to 100mmcfd and curtailment would jump to 235mmcfd.

Domestic and commercial sectors would be supplied with 948mmcfd in December and face a curtailment of 67mmcfd provided the cost estimates of Rs27bn were made available. However, these two sectors could be supplied about 1,048mmcfd in January with a curtailment of 117mmcfd if the government arranged Rs42bn financing.

The meeting was told that SNGPL would get 252mmcfd of gas in December 2021 when compared to the same month last year as its overall supply (local gas plus RLNG) would decline from 1,808mmcfd last year to 1,556mmcfd this year. The drop is mainly due to depletion of gas fields (64mmcfd) and non-procurement of LNG spot cargoes (186mmcfd).

In January 2022, SNGPL would get 202mmcfd less gas as compared to the same month in 2021 as its supplies would drop from 1,822mmcfd (both local gas and RLNG) to 1,620mmcfd. The decline included 82mmcfd from local gas fields and 120mmcfd due to less procurement of LNG.

According to the mitigation measures proposed by the SNGPL, total closure of gas supply to the CNG sector, non-export captive power plants and non-export general industry has been proposed besides partial closure to captive power plants (export) that will be provided gas for three-and-a-half days a week.

The meeting also considered a summary of the Ministry of Maritime Affairs on construction of oil storage capacity in the Oil Installation Area in Keamari, Karachi. The meeting was informed that insufficient storage infrastructure at the ports was creating bottlenecks in the supply chain and resulting in increased costs.

To review the situation and the available options, the CCoE formed a sub-committee under SAPM on CPEC Khalid Mansoor that will also comprise a Planning Commission member and secretaries of the power and petroleum. The panel is tasked with coming up with proposals within two weeks.

Published in Dawn, November 19th, 2021

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