Gas crisis to persist for 1-2 years

SSGC MD says activation of LNG terminal-III will help end gas shortage

KARACHI:

Gas crisis, being faced during winter seasons in Pakistan, is likely to continue for one to two more years until the setting up of new liquefied natural gas (LNG) terminals at the port, said Sui Southern Gas Company (SSGC) Managing Director Imran Maniar.

During his visit to the Karachi Chamber of Commerce and Industry (KCCI) on Thursday, he pointed out that difficulties and challenges were being faced in installing the new terminals but he foresaw an end to the gas deficit in future.

He stressed that the completion and activation of Terminal-III at the port would certainly help in ending gas shortage being suffered by all types of consumers in Karachi and elsewhere.

“To achieve this, SSGC will have to make a commitment to the terminal owner that it will buy an additional 500 million cubic feet per day (mmcfd) of gas,” he said.

He elaborated that a total of 4,000 mmcfd of gas was being consumed all over the country while SSGC received 950 mmcfd from indigenous resources in Sindh and Balochistan and 150 mmcfd of re-gasified LNG (RLNG) while the remaining was being used by Sui Northern Gas Pipelines Limited (SNGPL).

SSGC took 110 mmcfd from Balochistan and the remaining came from Sindh but gas reserves were depleting at a rapid pace of 10% per annum, Maniar lamented.

“The company takes around 150-180 mmcfd of RLNG from the two terminals at Port Qasim and the supply shrinks to 70-80 mmcfd during winter,” he said. “At the same time, the demand for gas in Balochistan widens to 120 mmcfd, which creates a shortage of around 195 mmcfd.”

To deal with the gas crisis, the government has designed a mechanism and ranked all consumers from top to bottom. He explained that domestic consumers were at the top of the list, followed by the export-oriented industry while non-export industry and CNG stations were at the bottom.

Maniar stated that SSGC carried out load management during the winter season as per the list provided by the government and suspended RLNG supplies to K-Electric, which led to an additional supply of 75 to 80 mmcfd to consumers.

“Suspension of gas supply to CNG stations saves an additional 20 mmcfd,” he underlined.

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He revealed that there was tremendous pressure on SSGC to provide gas to villages and it required an investment of billions of rupees, a large workforce and expensive equipment.

The managing director informed the businessmen that the industry was covering 70-80% cost of gas being consumed by the domestic consumers because the tariff in Pakistan was lower than that in countries such as Qatar and Iran.

Speaking on the occasion, Businessmen Group Chairman Zubair Motiwala pointed out that the first and foremost problem being faced by gas consumers was low pressure in the industrial zones of Karachi.

He lamented that the issue had widely damaged the industry as it was unable to meet its requirements including the efficiency benchmarks and delivery timelines.

Motiwala said that data indicated that 1,200 mmcfd of gas was available from indigenous resources 10 years ago when the industries were utilising around 385 mmcfd and around seven years ago, a decline to 335 mmcfd was witnessed in industrial consumption.

“Later, this drop deepened but at present the maximum consumption by the industries is not more than 400 mmcfd,” he said. “We are concerned about the future as demand for gas continues to rise.”

He noted that the industries had imported machinery worth $1.5 billion to enhance their production but all the equipment required gas and electricity to function.

He pointed out that demand from the industries during winter remained intact, yet the sector suffered the most, which was unjust.

“Gas shortage does not emerge because of rise in demand by the industries, rather it is faced purely due to enhanced consumption by the domestic users,” he said.

Published in The Express Tribune, September 17^th, 2021.

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