Gas crisis may worsen next year, cabinet body told

Committee informed 70mmcfd gas to be added to SSGC system this month to overcome shortage in Sindh

ISLAMABAD: The Cabinet Committee on Energy (CCoE) on Wednesday stressed the need for working on contingency plans to overcome gas shortage, bringing more efficiency in the distribution system and providing more options of energy sources to the consumers.

In a meeting chaired by Adviser to Prime Minister on Finance Dr Hafeez Shaikh, the CCoE sought energy ministry’s briefing in the next meeting on the current power sector situation so that the issues and problems in both the gas and power sectors could be properly analysed.

The meeting received a briefing from the energy ministry on the prevailing situation. The participants were informed that 70 million cubic feet per day (mmcfd) gas was expected to be added to the Sui Southern Gas Company (SSGC) system by end of January to overcome a gas crisis in Sindh.

The CCoE was informed that lack of gas exploration during last 10 years cut the production by 7% while demand rose by 5% annually, resulting in a huge shortfall, which climbed to nearly 270mmcfd by December 2019. In view of 2020-21 projections, the shortfall would top 477mmcfd.

One of the major reasons was an upsurge is the gas consumption in the winter season – almost double of the consumption in summer, the petroleum division said, adding that the domestic sector preferred to use heavily-subsidised gas during winter compared with any other energy source.

The committee was informed that work to add 70mmcfd in the SSGC system and take the liquefied natural gas (LNG) supplies to the Sui Northern Gas Pipelines Limited (SNGPL) to 1300mmcfd had already started.

However, the petroleum division said, the implementation of these projects was hampered by the issues related to the grant of ‘right of ways’ from the Sindh government, as the province had granted only one ‘right of ways’ so far, while two more were awaited since last summer.

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The briefing covered the current situation of demand and supply of gas, re-gasified liquefied natural gas (RLNG), LNG requirement, gas allocation and management, average gas supplies, winter load management, indigenous gas production, supplies and consumption in different regions.

The petroleum division informed the committee that in view of 2020-21 projections, the government had decided to build additional terminals, while five new private terminals had been awarded in November last year.

The CCoE was also informed that the process for a dedicated pipeline of 1.2bcfd-plus, required to carry imported LNG from these terminals to the north, would begin soon. The committee sought a detailed plan for overcoming the gas shortage and smooth supplies during the whole year.

It asked the energy ministry to brief the committee in the next meeting on the current situation in power sector in order to properly analyse the issues in both the gas and power sectors so that the gap between the demand and supply in the energy sector could be bridged.