High time K-Electric signs a valid GSA to end impasse: SSGC : AsiaNet-Pakistan

High time K-Electric signs a valid GSA to end impasse: SSGC

March 31, 2018 | General, Official News | Share:

Karachi, March 31, 2018 (PPI-OT): SSGC has once again taken exception to K-Electric’s tactics for blaming SSGC over its electricity load shedding by misleading the general public that SSGC is required to supply 276 MMCFD gas. The following background will explain SSGC’s stance.

In 1978, SSGC and KESC executed two Gas Sale Agreements (GSA) of 6.66 MMCFD for KESC SITE Power Plant and 3.33 MMCFD for KESC Korangi Power Plant, both of which total to 10 MMCFD gas. Based on these two GSAs, SSGC started supplying gas to then KESC. With the passage of time, the Government of Pakistan (GoP) allocated 236 MMCFD gas up to 2001. Since at that time indigenous natural gas was available and gas fields were supplying adequate quantities, SSGC kept on supplying gas to then GoP-owned KESC.

In 2002, OGRA was set up. As a requirement, SSGC acquired its transmission and distribution license from OGRA in 2003. One of the requirements set by OGRA was that no customer shall be supplied gas without a valid GSA. Since 2003, SSGC approached the then KESC several times to sign a mutually agreed GSA for the gas quantities being supplied to KESC as per the allocation. KESC, however, was never willing and in fact categorically wrote to SSGC that it was not interested in providing a Gas Security Deposit (GSD).

In 2007, when KESC was already privatized, GoP allocated 40 MMCFD gas with certain conditions and one of the conditions was the responsibility of KESC to sign a GSA within a certain time period failing which the gas allocation will lapse without any recourse. As KESC failed to sign the GSA, the allocation is no longer valid.

As of date K-Electric (formerly KESC) has not agreed to sign a GSA. To recover SSGC’s outstanding payments, SSGC and KE mutually executed various payment plans which the latter never fulfilled and as a result the outstanding amount continued to mount. Despite attempts by SSGC management at various occasions, KE has always avoided signing and negotiating GSAs with the gas utility.

The insistence of K-Electric for demanding 276 MMCFD gas based on the Government of Pakistan allocations is another KE tactic to put the blame on SSGC. It has been 40 years since SSGC and KESC signed their only agreements back in 1978. The first allocation made by the Government of Pakistan dates back to 1970s or 1980s whereas the second allocation was made in 2001. The gas allocations made by the Government are never for lifetime as gas fields in Pakistan are constantly being depleted resulting in demand supply gap. Besides, KE, SSGC has to cater for its other customers as well particularly its domestic consumers.

Once the gas allocation is made, the terms and conditions of the actual supply need to be agreed upon through a GSA. Its high time KE realizes that blaming SSGC for electricity load shedding in Karachi will not work. Instead it should clear all its outstanding payments and come on table to sign a valid GSA.

For more information, contact:
Chief Manager (Media Relations)
Sui Southern Gas Company Limited (SSGC)
Corporate Communication Department (Media Relations)
ST-4/B, Block 14, Sir Shah Suleman Road,
Gulshan-e-Iqbal, Karachi
Tel: +92-21-99021773, +92-21-99021000
Fax: +92-21-99231662
Cell: +92-322-2225159
Email: inayatullah@ssgc.com.pk, info@ssgc.com.pk
Web: www.ssgc.com.pk

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Category: General, Official News