‘Halting of new gas connections to benefit existing consumers’

SSGC deputy MD says industries be given priority, supplied cheap gas.

KARACHI:

The government’s decision to halt new gas connections, owing to shortage of the commodity, is a good idea because adding new consumers will slice the share of existing consumers, according to a top official of Sui Southern Gas Company (SSGC).

Speaking to The Express Tribune at the SSGC head office on Friday, Deputy Managing Director (Customer and Financial Services) Azim Iqbal Siddiqui said that new consumers would hurt existing large-scale industrial consumers, rather than domestic consumers, due to the large volume of gas used by industries.

He informed that the company was in contact with the government to accommodate hundreds of customers who had already applied for new connections. He added that applications for new CNG stations did not exceed 70. Citing SSGC figures, he said there were 611 CNG stations in February, with few stations receiving new gas connections in March.

“Pakistan Petroleum Limited and Oil and Gas Development Company Limited  need to develop new gas fields on an urgent basis to reduce the demand-supply gap,” asserted Siddiqui.

Several new gas fields that have been discovered, such as Sanjhoro in Sindh and Zargoon in Balochistan, require development soon. Through these projects, the company expects to add 60 million cubic feet per day of gas to its network.

Siddiqui informed that SSGC officials had also met with Dr Samar Mubarakmand to discuss the coal gasification project in Thar coalfields. “Coal gasification is a very good idea but is in its initial stages,” he said.

“I believe the industry should receive gas on a priority basis, compared with other customers,” said Siddiqui. “Countries all over the world follow a model in which industries get priority.”

He explained that cheap gas would eventually reduce industrial production costs and create employment to boost the economy.

Citing the Bangladesh model, he said Bangladesh charges four times more from domestic consumers than it charges industrial consumers in order to support the industry. “On the other hand, Pakistani industrial consumers receive gas at four times the rate domestic consumers pay,” said Siddiqui.

Giving details of the $270 million World Bank loan, he said SSGC expects to finalise the loan with the Government of Pakistan by June. SSGC has been locked in talks with the World Bank for the loan, to upgrade its distribution system and reduce gas losses.

At present, SSGC is facing an acute gas shortage owing to the annual turnaround (ATA) of Bhit gas field – one of the company’s three largest fields. The 22-day long maintenance period will end on May 4 and by that time the company is relying on load management.

Published in The Express Tribune, April 23^rd, 2011.