SSGC fears reduced gas supply to consumers in summer

Blames continuously depleting gas reserves in country

ISLAMABAD: With continued increase in gas demand, Sui Southern Gas Company (SSGC) - one of the two transmission and distribution companies in the country - has expressed fear that supplies to consumers may be curtailed further in coming months as production from old fields shrinks.

While the demand for natural gas usually beats supply in winter months, the SSGC’s claim of a significant increase in domestic demand in summer is unclear. The demand may have gone up because of the difficulty in restricting the use of natural gas in power generators at households and commercial centres.

Prime Minister Shahid Khaqan Abbasi earlier claimed that Pakistan is enjoying surplus gas supply, but for an interim period due to increase in imports. He has also boasted of drilling a record number of wells and enhanced gas supplies during the tenure of current PML-N government.

When approached for comments, SSGC told The Express Tribune that existing gas reserves in the country were persistently depleting.

“In the year 2015-16, gas supply stood at 1,280 mmcfd (million cubic feet per day), in 2016-17, it contracted to 1,200 mmcfd and now we are getting 1,175 mmcfd and further reduction is expected in coming months,” an SSGC spokesperson said.

“While our domestic load is increasing day by day and around 25 to 30 mmcfd is added per annum, the uninterrupted supply of gas to the domestic sector remains top priority.” Owing to the gas shortage, according to the spokesperson, SSGC could not meet actual contract obligations and the load was managed as per load management policy of 2013.

Under the policy, compressed natural gas (CNG) outlets remain closed for three days in a week, industries and captive power plants once a week and curtailed supply is maintained to fertiliser and power producers.

Turning to the ongoing row with K-Electric, the SSGC official said, “If K-Electric signs a gas supply agreement, clear its dues and pay security deposit, gas can be managed by curtailing supply to least priority customers as per the load management policy of 2013.”

At present, domestic and commercial consumers are first priority in the priority list, power producers second, industrial units and fertiliser producers third, captive power and cement plants fourth and CNG outlets fifth. Some industry officials believe that a sudden reduction in gas supply by SSGC to K-Electric is a pressure tactic by the former.

“With renewed expression of interest by Shanghai Electric Power to acquire K-Electric, it is an ideal time for SSGC to apply pressure and settle the disputed dues,” an official well aware of the K-Electric-SSGC dispute said.

Instead of making the people and industries suffer due to power cuts, according to the official, the government should devise a solution for allocating gas supply from the least priority sectors such as CNG outlets to power producers which comes second on the priority list.

With SSGC making efforts to recover the disputed amount, the fallout is being felt by the people of Karachi as well as businesses that are enduring frequent power blackouts.

Published in The Express Tribune, April 5^th, 2018.

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