ISLAMABAD: As the Economic Coordination Committee (ECC) is likely to withdraw the allocation of locally produced gas to a consortium of four fertiliser plants in Punjab, the government hopes it will be able to enhance supplies to domestic consumers in the upcoming high-demand winter season, sources say.
Domestic consumers have been facing gas load-shedding for years in the winter season, but enhanced supplies will help overcome outages this time around.
However, some officials suggest that the domestically produced gas should be diverted to public sector power plants, which will reduce electricity load-shedding and bring down consumer tariff as power plants will switch to the cheaper fuel.
The current government has been importing liquefied natural gas (LNG) from Qatar since March 2015 and it is being provided for those sectors that had faced a shortfall. These sectors are fertiliser plants, compressed natural gas (CNG) filling stations and industrial units.
The locally produced gas, which may now be diverted, was allocated to the consortium of fertiliser plants in Punjab during the tenure of previous Pakistan Peoples Party (PPP) government.
However, these plants are now being run on imported LNG, therefore, the government has drawn a plan to withdraw the allocation of 155 million cubic feet of gas per day (mmcfd).
It will be re-allocated to public gas utilities – Sui Northern Gas Pipelines (SNGPL) and Sui Southern Gas Company (SSGC) – for onward supply to domestic consumers.
Sources said the PPP-led government in 2012 had approved a model under which gas reserves from selected fields were earmarked for a group of fertiliser plants associated with the SNGPL network on take-and-pay basis until the fields were exhausted. The fields included Kunnar-Pasakhi Deep, Mari, Bahu, Reti Maru and Makori East.
Under the plan, 79 mmcfd of gas was allocated to Engro Fertilizers, 40 mmcfd to Dawood Hercules, 58 mmcfd to Pakarab Fertilizers and 25 mmcfd to Agritech Limited.
It was agreed that the fertiliser plants would enter into an agreement with the gas utilities for gas transmission through their main lines from the agreed point of entry.
The main purpose behind the model was to provide uninterrupted gas supply from the dedicated gas fields to the four fertiliser plants off the grid by scrapping their gas sales agreements executed with SNGPL, which would likely result in freeing up the gas and pipeline capacity for consumption by other consumers.
Now, the ECC is likely to re-allocate 130 mmcfd from the Kunnar-Pasakhi Deep field, operated by Oil and Gas Development Company, to SNGPL and SSGC. The petroleum ministry has also proposed re-allocation of 25 mmcfd from the Makori East field of MOL to SNGPL for reducing its demand and supply deficit.
Published in The Express Tribune, August 16th, 2017.