Govt set to abandon gas supply plan

Ministry wants to shift 202 mmcfd from fertiliser units to domestic consumers


Zafar Bhutta October 25, 2016
Under the model approved during the PPP’s tenure, the allocated gas was to be transmitted to four fertiliser plants at an agreed delivery point. PHOTO: FILE

ISLAMABAD: With gas shortages expected to hit consumers hard in the upcoming winter season, the government is set to shelve a plan of dedicated gas supply from new discoveries to a group of four fertiliser plants approved during the tenure of previous Pakistan Peoples Party (PPP) government, officials say.

The Economic Coordination Committee (ECC), in its meeting held on December 18, 2012, had allocated 202 million cubic feet of gas per day (mmcfd) from the newly discovered sources to four fertiliser plants - Engro Fertilizers, Dawood Hercules, Pakarab Fertilizers and Agritech Limited.

Mari supplies gas to fertiliser plant without ECC’s nod

However, the petroleum ministry now wants to provide the gas to domestic consumers on a permanent basis. The ECC will take a decision on the matter.

Under the model approved during the PPP’s tenure, the allocated gas was to be transmitted to the four fertiliser plants at an agreed delivery point.

The fertiliser manufacturers were required to enter into an agreement with the two gas utilities - Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company (SSGC) for gas transmission through their main line from the agreed point of delivery to the designated point under the Third-party Access Rules 2012 based on a tolling fee.

The main objective behind developing the model was to ensure uninterrupted gas supply from the dedicated fields to the off-grid fertiliser plants by scrapping their gas sales agreement with SNGPL, which would have made available gas in the system and pipeline capacity for utilisation by other consumers.

According to officials of the Ministry of Petroleum and Natural Resources, Agritech Limited was running on domestic natural gas supply whereas Engro Fertilizers’ new plant was being provided gas by Mari Petroleum Company.

Pakarab Fertilizers and Dawood Hercules were running on imported liquefied natural gas (LNG).

This shows that all the four fertiliser plants were operating independently without applying the gas supply model approved by the ECC in 2012.

According to an official, Kunnar Pasakhi Deep field has recently started producing gas but due to non-implementation of the gas sales agreement, it could not be provided to the fertiliser plants.

LNG imports: Improved gas supply in winter expected

Keeping this in view, the petroleum ministry wants to allocate 130 mmcfd from Oil and Gas Development Company’s Kunnar Pasakhi Deep field to SSGC and SNGPL on an equal-sharing basis. It further wants to allocate 25 mmcfd from the Makori East field to SNGPL for meeting its gas demand and supply deficit.

At present, the situation in Punjab is worsening for the domestic consumers. According to the winter gas supply management plan designed by the federal government, SNGPL will be implementing a load shedding plan from 10pm to 5am every day and for the first time domestic consumers will have no gas at night due to the shortfall.

Published in The Express Tribune, October 25th, 2016.

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COMMENTS (1)

Sam | 7 years ago | Reply Its about winning election and voters in Punjab so PML N can continue to win Federal election. ! Just want to do short term benefits for voters in Punjab. :)
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