SNGPL Managing Director Arif Hameed stated this while speaking at the Lahore Chamber of Commerce and Industry (LCCI) on Wednesday.
He said the ban on new gas connections for industrial use was imposed in October 2011, adding the needs of existing consumers in Punjab were not being met properly and removal of the curbs would add more consumers.
He said the company was taking strict action against internal mismanagement and corruption while pursuing its policy of zero tolerance for corrupt elements.
“Gas Infrastructure Development Cess (GIDC) has been imposed by the government through an ordinance and SNGPL has no role in it as it is just a collecting agent,” said Hameed.
He pointed out that the unaccounted-for-gas (UFG) losses of SNGPL stood at around 10%. “It is a misperception that all this is due to theft. Theft constitutes just 3-4% while the rest is because of distribution losses.”
He was of the view that the distribution losses could not be avoided as Pakistan had one of the longest pipeline networks. SNGPL is further expanding the network in order to increase its capacity to handle imported liquefied natural gas (LNG).
Hameed stressed that a lot of exploration activity was going on in the country to reach untapped gas deposits.
Speaking on the occasion, LCCI President Ijaz A Mumtaz said businessmen had gone through innumerable ups and downs due to the energy crisis. Though SNGPL and Wapda had tried to play a positive role, much needed to be done to improve the situation, he suggested.
Mumtaz believed that GIDC would make Pakistani products uncompetitive in the global market and hurt exports. “The Supreme Court has already declared GIDC as illegal, confirming decisions of the high courts of Peshawar and Sindh.”
He suggested that the government should lift the ban on new connections to encourage the establishment of new industrial units. In addition to this, SNGPL should divert natural gas away from compressed natural gas (CNG) stations to the industry and power plants.
He argued that SNGPL did not have a concrete plan to bring down UFG losses. “The quantity of gas that is wasted is around 406 mmcfd, ie 10.5% of the combined production of all gas fields in the country.
Mumtaz said in order to reduce gas shortage, which had gone beyond 50% of existing supply, no appreciable exploration activities were carried out by SNGPL to tap new deposits.
According to the Oil and Gas Regulatory Authority (Ogra), at present the supply-demand gap stands at around 2 billion cubic feet per day (bcfd) and will reach 8.5 bcfd in 2028-29.
The government plans to import LNG at $18 per million British thermal units, more than four times the current wellhead gas price of $4 per mmbtu. This will lead to an increase in gas tariff.
Published in The Express Tribune, December 4th, 2014.
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