Just a technicality: SNGPL customers may face extra billing worth Rs27b

Conversion of measurement system for gas production and distribution on cards.

ISLAMABAD:

A plan under consideration, which proposes conversion of the system of measurement used in the country’s gas production and distribution system from Imperial to Metric units, may burden gas consumers on the Sui Northern Gas Pipelines (SNGPL) network with Rs27 billion in additional charges.

The Metric system uses metres to measure length, and kilogrammes to measure weight. On the other hand, the Imperial system uses pounds to measure weight.

Sources told The Express Tribune that a meeting was held on September 10 to discuss the plan. Representatives of gas utilities briefed attendants that the conversion of the existing system will require huge investment, as equipment installed at gas transmission and distribution centres will have to be replaced, along with meters for commercial, industrial and bulk consumers.

“This conversion will require the replacement and/or procurement of flow computers, CCR screens, moisture analysers, and densitometers and other related equipment and instruments on reception and sales gas metering; as well as other related lab and online equipments that are in Imperial units,” gas companies’ representatives said.

They informed the meeting that in addition to billions of rupees in investment, the conversion would also require the consent of gas producers and consumers for necessary amendments to already signed agreements for sale and purchase of gas.

It was also observed that some conversion factors may lead to administrative issues and unnecessary disputes between gas buyers and consumers due to operational and technical issues.

According to details provided by SNGPL, the total conversion cost of its transmission and distribution network will be at least $230-250 million.

SNGPL has taken up the matter with gas producers for their comments and inputs. Ocean Pakistan and other producers have said that they will not object to the proposed conversion if SNGPL installs all requisite equipments at its own risk and cost; ensures that the conversion has no technical or financial impact; and existing Gas Sales Agreement (GSA) terms remain intact without changes.

The Sui Southern Gas Company (SSGC) representative attending the meeting was advised to provide tentative cost estimates for the proposed conversion on the SSGC system. He was also advised to provide the standard conversion factor that will be used to convert current measurements to the Metric system.

Representatives of gas utilities proposed that a joint meeting of all stakeholders; including gas producers, bulk gas consumers, gas utilities, the Oil and Gas Regulatory Authority and the Directorate General of Petroleum Concessions; be convened to finalise modalities.

Keeping in view the size of the investment required, along with potential administrative and technical disputes which may arise between gas producers and consumers, representatives of gas companies were of the opinion that instead of modifying the entire existing system, the measurements in use may be converted using agreed conversion factors for reporting purposes only.

Published in The Express Tribune, September 20^th, 2012.