Gas supplies: Govt warms up to brace impending winter shortages

ECC decides to conduct an energy audit; cut gas supplies to inefficient power plants.

ISLAMABAD:

Impending gas shortfall in winter kept country’s top managers on their feet on Friday, mulling over how to simultaneously keep the homes heated, the industries powered and the transport plying on the streets in the coming months.

With dwindling gas supplies and increasing demand, gas shortfall in coming winters is expected to peak at 1.6 billion cubic feet per day, about 27% of total demand in the country.

In an attempt to ensure better use of limited supplies, the Economic Coordination Committee (ECC) of the Cabinet, headed by Finance Minister Dr Abdul Hafeez Shaikh, decided that gas supply to power plants would be cut if they failed to improve efficiency.

An official of the finance ministry said the government would conduct an energy audit of the Independent Power Producers and the government-owned generation plants; if they’re found to be inefficient vis-à-vis their gas usage, the management would be asked to either invest in their plants or face a cut in their gas supply.

Load management plan

The ECC also approved the gas load management plan for coming winters.

The body decided to cut gas supplies to Compressed Natural Gas (CNG) stations and industrial units for three consecutive days per week while supplies to the fertiliser sector would be cut for 15 days per month.

The committee, however, decided that supplies to IPPs and fertiliser plants would be constantly reviewed, to ensure uninterrupted supply to domestic consumers.

In worst-case scenarios, the IPPs would be ensured 76 million cubic feet per day (mmcfd) of gas per day, the finance ministry official said.

The government estimated that this winter, demand would peak at 5.8 billion cubic feet per day against a supply of 4.2 billion cubic feet per day, leading to a gap of 1.6 billion cubic feet per day.

Imported gas

The ECC constituted a committee to fine tune proposals for the finalisation of the draft for the Turkmenistan-Afghanistan-Pakistan-India gas pipeline project. The committee would submit its report before the visit of the Turkmen president due next week.

Another committee was constituted by the ECC to tweak the details of earlier proposals whereby the country’s two gas companies will supply gas imported from Iran to efficient power plants, after entering into agreements with them.

The proposals approved earlier said that 750 mmcfd of gas imported from Iran will be allocated to the northern and southern gas companies in the ratio of 65% and 35% respectively.

Opening up trade

The ECC also approved regulatory changes in the import and export policy order and allowed for import of 12 more items from India under the positive list. At present, 1,996 products can be imported from India.

This could be last such change in the order since Pakistan has decided to first move from a positive to a negative list, containing a few hundred restricted items, before granting India the most favoured nation status. The cabinet has already allowed the commerce ministry to negotiate with India on the status.

Secretary Commerce Zafar Mahmood, leaving for New Delhi on Monday, said the focus of his visit would be “normalisation of trade ties.”

The ECC also permitted import of three separate items from India on a one-time basis. Mahmood said two of these items were related to flood relief activities while one was mistakenly imported by a trade body.

The ECC constituted a committee to review the interior ministry’s request for waiver of additional duties on import of bullet-proof vehicles in the wake of “rising incidents of terror strikes against persons hailing from various walks of life.”

The ECC also renewed Rs2 billion in guarantees for Pakistan Steel Mills.

Published in The Express Tribune, November 12^th,  2011.