LAHORE: As the Oct 31 deadline for signing contracts for Regasified Liquefied Natural Gas (RLNG) supply by 20,000 of 23,000 commercial consumers has passed, business community leaders have asked the Sui Northern Gas Pipelines Limited (SNGPL) to extend the deadline until Nov 10 in order to persuade all such consumers to sign agreements for RLNG supply in winter.

The SNGPL, on the other hand, has advised the enterprises that they either turn to the RLNG or risk losing their indigenous gas supply. The company also promised the business people that their request to extend the deadline until Nov 10 will be forwarded to the federal government’s power division for approval.

“After meeting KP’s consumption requirements, Punjab only receives about 500 MMCFD which is not enough for the domestic consumers,” Senior General Manager Syed Jawad Naseem told business people at the Lahore Chamber of Commerce & Industry (LCCI) on Monday. He said that signing the RLNG contract is a viable option for the industry.

Mr Naseem said since the RLNG and system (indigenous) gas are supplied through the same pipes, the industry will not need to change the equipment after shifting to the RLNG. He said the company is trying to find a solution to the problem of differences in production, price, and GIDC in Sindh and Punjab.

“There is no production of gas in Punjab. But the province has the highest consumer base in terms of the number of users,” he added.

He said the global energy crisis spurred by the conflict in Ukraine has already affected the global energy supply chain, and price hikes have taken people off the roads around the globe due to price increases. Due to the government’s policies, the rupee is stabilizing, and this will be reflected in the prices of energy as well. He pointed out that domestic consumers are the top priority in terms of gas supply. Due to depleting gas reserves, all the commercial consumers, including new housing societies, have been shifted to RLNG for the last four or five years.

“The winters are a challenge, and commercial consumers should cooperate with us. There are two options for commercial consumers—one is to switch onto RLNG and use LPG,” he opined.

LCCI President Kashif Anwar said the gas in Punjab is very expensive as compared to Sindh and KP, due to which the production cost here is very high.

“The government has assured five zero-rated sectors to supply the gas at $9 per MMBTU while the rate for the remaining sectors is double,” he said, adding that the gas should be provided at a uniform rate throughout the country like electricity and petroleum products.

Mr Anwar said the commercial customers have been served notices that the gas supply to them will be suspended from Monday. The commercial consumers, he said, have been given very little time. “I think at least one month should be given and their legitimate demands should be considered,” he sought

Mr Anwar said the gas tariff for commercial consumers is already too high and if the RLNG is supplied to the corrugated, packaging and other industries at expensive rates, it would become difficult for the industrialists to run their businesses. He said the new connections are being shifted to the RLNG, and their price is directly linked with the dollar.

“Therefore, this decision should be reviewed in the larger interest of the industry,” he said, assuring the company representative to convince the industry to shift to the RLNG.

According to a letter by the LCCI to the SNGPL on Oct 31, the former explained the impact of the disconnection of existing commercial connections on the businesses.

“The disconnection of the gas supply can have a detrimental impact on the economic activities and can result in tremendous unemployment. In this scenario, we would request you to extend the Oct 31 deadline for signing the RLNG supply contracts by 10 days to Nov 10 with the SNGPL for the upcoming winter,” reads the letter, a copy of which was also sent to the petroleum division.

According to a petroleum division official, there are up to 23,000 commercial consumers with system gas supply on commercial gas connections.

“Of the 23,000 users, up to 3,000 have signed RLNG supply contracts, while the remaining consumers had yet to do so.” They all consume 32MMCF per day, which the government wishes to redirect to the domestic sector,” he explained.

SNGPL MD Ali J Hamdani told Dawn that the company will evaluate the LCCI’s request for a deadline extension.

“We will take their desire into account. And I believe there will be no commercial connection disconnection for 10 days,” he added.

Published in Dawn, November 1st, 2022