ISLAMABAD: The Sui Northern Gas Pipeline Limited (SNGPL) has become a profit-making company from due to significant reduction in losses.
According to a notice sent to the Pakistan Stock Exchange, the company reported a profit of Rs124 million in the financial year 2015-16 against a loss of Rs2.4 billion in financial year 2014-15. The company’s earnings per share were Rs0.20 compared to Rs3.93 loss per share in 2014-15.
The actual profit in 2015-16 was Rs2.5 billion but Oil and Gas Regulatory Authority (Ogra) had made adjustments in arrears of the last three years, resulting in reduction of profit, a senior official of SNGPL told The Express Tribune.
He said that major contributors in turning around the company were reduction in losses and increased assets. He said that unaccounted-for-gas (UFG) stood at 10.98% in 2014-15, which came down to 9.21%. Following the augmentation of pipeline projects in the future company’s assets would be further increased, the official added.
SNGPL’s UFG loss, caused by gas stealing and system leakages, dropped to 9.21% in June 2016, resulting in improved earnings for the gas utility. Now, the losses have further decreased.
Apart from this, the company is working on augmenting its pipeline network to enhance capacity and transmit 1.2 billion cubic feet of liquefied natural gas per day.
“The UFG loss has fallen further to 8.3% and its impact will be reflected in the company’s upcoming revenue requirement,” revealed a senior official of SNGPL while talking to The Express Tribune. “A 1% reduction in the UFG level means injection of Rs2 billion into its profit.”
According to the official, Ogra allows recovery of 4.5% UFG loss from gas consumers whereas the remaining burden is borne by the company. The decline in UFG level will provide the company an opportunity to stave off a major hit to its balance sheet.
Published in The Express Tribune, December 14th, 2016.