PM Ashraf seeks 0.4m new gas connections

Officials say the move will put an additional burden on already depleting resources.

ISLAMABAD:

Prime Minister Raja Pervaiz Ashraf has directed the Oil and Gas Regulatory Authority (Ogra) to allow for the provision of 0.4 million new gas connections – at a time when 1.1 million applications are already pending with the Sui Northern Gas Pipelines Limited (SNGPL).

Parliamentarians are eager to provide new gas connections in towns and villages in their respective constituencies to win favour with voters ahead of the upcoming general elections. And the prime minister is in no mood to be left behind.

The move, however, will not bode well for the present gas crisis.

“Ogra had earlier allowed SNGPL to facilitate 250,000 new gas connections, but the prime minister has now directed it to allow the gas utility to  give 0.4 million new connections before the forthcoming parliamentary polls,” said a government official, adding that it will put an extra burden on the present gas resources unless new ones are discovered.

An Ogra official maintains the authority had once placed a ban on new gas connections till the discovery of fresh reserves, but the government forced it to revoke the stipulation.

“New connections are also against the condition of the licencee. SNGPL is bound to provide gas to present consumers before initiating new development schemes,” he said.

Presently, SNGPL’s demand is 1.57 billion cubic feet (bcf) gas per day. The utility is expected to face a 1bcf shortfall by January 2013. It has given connections to 0.16 million consumers, whereas applications for another 1.1 million new connections are still pending.

Exploration work is underway to discover new resources, with 240 million cubic feet of gas per day (mmcfd) expected to be added to the grid in the next two and a half years.

Earlier, the Ministry of Petroleum proposed a ban on new gas connections till 2014, when gas flow from the Iran-Pakistan (IP) gas pipeline is expected to begin. A summary for the proposal was sent to the prime minister, but no action was taken.

In its summary, the ministry proposed a ban on new commercial gas connections till 2014. It also suggested a ban on connections for high-rise buildings and new housing societies.

SNGPL and the Sui Southern Gas Company Limited (SSGC) are currently working on 2,900 ongoing schemes costing Rs30 billion and 944 new schemes costing Rs7.8 billion. 46% and 70% of the work on these schemes has been completed, respectively.

These development schemes will put an additional burden of 694 million cubic feet of gas per day on SNGPL, and 15 mmcfd on SSGC. SNGPL will provide gas to 1.75 million new consumers while SSGC to 65,280 consumers.

The two gas utilities have already spent Rs123 billion on infrastructure to provide gas to two million new consumers during the last six years.

From 2005 till 2011, SNGPL has laid 35,000 kilometres of pipeline costing Rs80 billion to provide gas to 1.45 million consumers. SSGC has spent Rs43 billion on laying down Rs14,000 km of pipeline to provide gas to 600,000 new consumers.

Published in The Express Tribune, October 31^st, 2012.