Shortfall widens as gas fields reduce supply to SSGC

Gas utility reported fresh drop of 35-40 mmcfd in supply from the fields

KARACHI: The gas crisis has worsened due to a further drop in supplies from different fields, slowing down industrial output and impacting people during the ongoing cold wave in Pakistan.

Sui Southern Gas Company (SSGC), which supplies gas to households, industrial and commercial consumers in Sindh and Balochistan, reported a fresh drop of 35-40 million cubic feet per day (mmcfd) in supplies from the fields on Thursday.

"The latest drop has widened the gas shortfall by around 10% to 450 mmcfd (in the SSGC network in the two provinces)," an SSGC spokesman said while talking to The Express Tribune.

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With the latest drop, gas supplies to SSGC have cumulatively declined by 80 mmcfd in the past one year to around 1,100 mmcfd, he said.

"Gradual natural depletion of gas reserves in the fields is hurting supplies. Besides, the drop in temperature has also slowed down the process of gas production," he said.

According to the latest data compiled by Pakistan Petroleum Information Service (PPIS) and Arif Habib Limited, different fields including Sui, Maramzai, Sutiari Deep, Bhit and Jhandial recorded a drop in gas production in the range of 1-5% in the week ended December 24, 2019.

The Cabinet Committee on Energy was told that "due to a lack of gas exploration in the past 10 years, the production of gas has declined by 7% while demand has risen by 5% annually," according to an official statement issued on Wednesday.

"The recent drop in gas production came mainly due to the shutdown of some of the fields for annual turnaround (ATA) and overhaul," Arif Habib Limited Deputy Head of Research Tahir Abbas said.

Secondly, the slowdown in manufacturing of petroleum products in refineries due to weak demand for their major product - furnace oil - also impacted gas production in the fields, he added.

Gas production was also affected by the annual shutdown of some of the fertiliser plants for maintenance, which were getting supplies from the Tal block, Mari, Uch and Kandkot fields, Abbas said.

"Production at Mari and Uch fields has been normalised while supplies from Kandkot are also approaching normal levels," he said.

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Furnace oil comes to around one-fourth of the production of all petroleum products in Pakistan. Owing to the suspension of furnace oil purchases since the closure of oil-based power plants, reservoirs are spilling over at almost all the refineries in the current winter.

The low production by the refineries has forced field operators to scale back their production levels as some of the fields produce both crude oil and gas simultaneously.

Abbas said overall gas supplies remained historically low despite the resumption of production in some of the fields.

"Cumulative production hovered around 3.7 billion cubic feet per day (bcfd) in the week ended December 31, 2019 compared to 3.9 bcfd in the previous fiscal year 2018-19…The production had dropped to 3.3 bcfd in November 2019," he said.

The shortfall in production has pushed SSGC and Sui Northern Gas Pipelines Limited (SNGPL) to reduce gas supplies to industries nationwide as they are bound to provide gas to the households first as per government directives.

Gas remains a lifeline and a source of survival for the people in winter when they use the fuel in heaters and geysers.

Published in The Express Tribune, January 10^th, 2020.

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