Non-stop supply to zero-rated units led to gas crisis

SSGC also cites consumer reluctance to use RLNG, lack of cooperation by industry as factors behind gas shortage


Zafar Bhutta March 07, 2019
SSGC also cites consumer reluctance to use RLNG, lack of cooperation by industry as factors behind gas shortage. PHOTO: FILE

ISLAMABAD: The management of Sui Southern Gas Company (SSGC) has told energy-sector managers that uninterrupted gas supply to zero-rated export-focused industries and reluctance on the part of consumers to use imported gas caused the natural gas crisis in Karachi and other parts of the country recently.

SSGC was of the view that lack of cooperation by the general industry and captive power plants was also the main reason behind the acute gas shortage.

Last month, consumers on the SSGC network faced a severe gas shortage, leading to the removal of the company’s managing director by the prime minister.

In a report sent to the Cabinet Committee on Energy, the SSGC management gave several reasons including lack of cooperation by the general industry and captive power plants which, it believed, were behind the gas crisis. However, the cabinet committee did not agree with the reasons. It expressed dissatisfaction over the SSGC’s response to the gas crisis in Karachi and other parts of the country.

When approached for comments, SSGC said the company was not aware of the views of the Cabinet Committee on Energy, therefore, it could not comment on them.

In the report, SSGC informed the cabinet body that the company got 1,195 million cubic feet of gas per day (mmcfd) from different fields in Sindh and Balochistan, but it was lower than the demand for 1,495 mmcfd in winter, resulting in a shortfall of 300 mmcfd.

SSGC pointed out that other reasons for the shortfall and low gas pressure in Karachi were depletion of domestic gas reserves, annual increase of 6-7% in domestic sales which amounted to around 35 mmcfd, and extreme prolonged winter this year in regions covered by the company, especially Balochistan.

It told the committee that uninterrupted gas supply to zero-rated industries, reluctance on the part of consumers to opt for imported re-gasified liquefied natural gas (RLNG), lack of cooperation from the general industry and captive power plants in curtailing their load on Sundays and wide gap between demand and supply due to severe cold caused the reduction in gas supply from the normal level of 2,100 mmcfd to the critical level of 1,950 mmcfd. This resulted in extremely low gas pressure on February 7-8, 2019.

In a bid to save the system, according to SSGC, some necessary measures were taken. These included reduction of 20 mmcfd in gas supply to K-Electric, one day extra closure of compressed natural gas (CNG) stations on Saturday and suspension of gas supply to general industry and its captive power plants on Sunday.

As a result of these measures, the company said in the report, the gas shortage in Karachi came under control and the “line pack was maintained at 2,128 mmcfd as on February 12.”

However, the cabinet committee was of the view that the reasons given by SSGC for gas shortage in Karachi were not satisfactory as domestic demand did not increase sharply in winter and there was no interruption in gas supply from any gas field during the discussed period.

The committee emphasised that cogent reasons should be presented in order to analyse factual position of demand and supply of gas in Karachi and other parts of the country. It directed the Petroleum Division to present convincing reasons backed by relevant data, which caused the gas shortage, as these would enable the committee to take decision on rectifying measures. 

Published in The Express Tribune, March 7th, 2019.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.

COMMENTS

Replying to X

Comments are moderated and generally will be posted if they are on-topic and not abusive.

For more information, please see our Comments FAQ

E-Publications

Most Read