SSGC sets up theft control dept to rein in losses

Company's security official believes high network losses deter foreign investors

KARACHI: Sui Southern Gas Company (SSGC) has set up a powerful gas theft control and recovery department, headed by a retired brigadier, to tackle the problem while laying new pipelines as part of China-Pakistan Economic Corridor (CPEC) projects and plans to import gas from Iran and Russia.

The department has been established after the passage of "Gas Theft Control and Recovery Act 2016" in the National Assembly last year. The law has empowered public gas utilities - SSGC and Sui Northern Gas Pipelines Limited (SNGPL) - to seek prison term of up to 14 years and penalty of up to Rs10 million from those found stealing gas.

The two utilities may even request services of paramilitary forces, including the Rangers, to curb gas theft and arrest culprits. SSGC's prosecution department is also headed by a retired military officer.

The company books 13% of its total gas supply to domestic, commercial and industrial consumers as transmission and distribution loss. About 57% of this loss - better known as Unaccounted for Gas (UFG) - is the result of theft from the pipeline network, according to SSGC and the Oil and Gas Regulatory Authority (Ogra).



SNGPL's UFG level stands at 15%, Ogra said in February 2017.

Briefing media on Wednesday, SSGC Director General (Security Service and Counter Gas Theft Operations Department) Brigadier (Retired) Muhammad Abuzar said China, Russia and Iran were eager to invest hugely in projects of gas export to Pakistan.

However, he asked "if such poor situation of high losses persists, then who will come to Pakistan."

SSGC official Salman Siddiqui pointed out that Ogra had only allowed 4.5% UFG loss that the utility recovered from the consumers. However, the company pays Rs1.5 billion to the regulator as penalty for each percentage point above the UFG threshold for its failure to curb the loss.

This adds to the financial burden as the company separately bears line losses of billions of rupees. Insight Securities calculated recently that one percentage point of UFG was worth Rs4 billion.

Abuzar said he had been tasked with bringing down the UFG loss by two percentage points in a year. He will submit his progress report biannually to the company.

In the past one month, the company has unearthed 11 mega theft cases in commercial and industrial sectors and lodged FIRs in 10 cases under the new law. "Many of the thieves are now behind bars and are being prosecuted in courts," he said.



The new law binds consumers to allow SSGC officers, accompanied by law enforcement agencies personnel, to enter their premises for investigation if they are suspected of misusing the gas connection or being involved in theft.

He said special forces and courts had already been set up in Sindh and Balochistan to deal with the matter as SSGC supplied gas to consumers in the two provinces.

SSGC and SNGPL have built widespread transmission and distribution networks across the country.

The two state-owned utilities have recently laid a gas pipeline from Karachi to Punjab for the transmission of imported re-gasified liquefied natural gas (RLNG) supplied by Qatargas.

They are also working on the second pipeline for transporting more imported gas while a third pipeline is also under consideration.

In June 2016, SSGC unveiled financial results for nine months ended March 31, 2016. In the period, its losses surged 87% to Rs9.37 billion (loss per share at Rs10.65) from Rs5 billion (loss per share Rs5.68) in the corresponding period of previous year.