Sui Northern Gas Pipelines Limited faces gas shortfall of 1400 million cubic feet which is main reason of ban on new connections imposed by government: Managing Director
Lahore, December 03, 2014 (PPI-OT): Managing Director of SNGPL Arif Hameed has said that SNGPL faces an overall gas shortfall of 1400 million cubic feet which was a main reason of ban on new connections imposed by the government of Pakistan. He said that SNGPL is taking strict action against internal mis-management and corruption and showing zero tolerance to the corrupt elements.
He was speaking at the Lahore Chamber of Commerce and Industry on Wednesday. LCCI President Ijaz A. Mumtaz, Vice President Syed Mahmood Ghaznavi, former Presidents Mian Muhammad Ashraf, Shahid Hassan Sheikh, Mian Muzaffar Ali, former Senior Vice Presidents Abdul Basit, Mian Tariq Misbah and Executive Committee Members also spoke on the occasion.
MD SNGPL said that Gas Infrastructure Development Cess (GIDC) was imposed by the Government of Pakistan through an ordinance. SNGPL has no role in imposition of GIDC as it is just a collecting agent.
He said that ban on new gas connections for industrial use was imposed by the Government of Pakistan in October 2011. The gas needs of the existing customers in the province of Punjab are not fulfilled properly so lifting the ban would add new customers in waiting.
He said that Unaccounted-for-Gas (UFG) losses of SNGPL are around 10 percent. It is a mis-perception that this 10 percent is composed of theft entirely. He said that the theft of gas is 3-4% while the rest 6-7% are distribution losses. He said that these distribution losses are inevitable as Pakistan has one of the longest pipe systems.
He told the house that SNGPL is expanding the pipeline network to increase the carrying capacity for the imported LNG. He said that lot of exploration activity is going on in the country to make use of the indigenous gas resources. Around 140 million cubic feet of gas has been discovered in Badin and efforts are being made to bring the gas in the system. Similar efforts are underway in various other areas of the country.
Speaking on the occasion, LCCI President Ijaz A. Mumtaz said that the businessmen of this country have gone through innumerable ups and downs due to the energy crisis in the country. He said that though SNGPL and WAPDA have tried to play a positive role but still much needs to be done to improve the situation as energy is engine of growth and its sufficient availability is must to keep industrial wheel moving.
He said that the business community of Lahore is facing multiple issues pertaining to gas sector which should be resolved on priority. LCCI president said that the industry is burdened by the enforcement of Gas Infrastructure Development Cess (GIDC) through an ordinance.
He said that the Supreme Court has already declared enforcement of GIDC as illegal, confirming decisions by High Courts of Peshawar and Sindh. He said that GIDC would make Pakistani merchandise uncompetitive in the global marketplace and hurt the country’s exports.
He said that currently there is a ban on new gas connections for industrial use. SNGPL should request the government to remove this ban to incentivize the formation of new industrial units/estates. He said that SNGPL should also advocate the complete diversion of natural gas from CNG to industry and power sector.
Ijaz A. Mumtaz said that the increased load shedding of gas in the winters would hamper the performance of industrial sector. He said that according to the reports in the newspapers, the gas supply to industrial sector in Punjab is likely to remain suspended from mid-December to March 2015. Furthermore, due to low gas pressure in winters, the industrial sector is not able to operate in full swing and hence ends up losing export orders.
He said that SNGPL does not have any solid plan to curtail unaccounted-for-gas (UFG) losses. The quantity of gas that gets wasted in the country is around 406 million cubic feet per day (MMCFD), i.e. 10.5% of the combined production of all gas fields in the country.
He said that the cost of this wasted gas is over rs21 billion and is enough to run a 1,500 to 2,000-megawatt power plant. He said that SNGPL also needs to adopt zero tolerance against internal corruption and mismanagement.
LCCI President said that in order to curtail gas shortage in the country (which has gone beyond 50% of existing supply), no appreciable exploration activities are carried out by SNGPL to make use of the indigenous gas resources in the country.
According to OGRA, the supply-demand gap which now stands at around 2 billion cubic feet per day (CFD) would reach 8.5 billion CFD in 2028-29. The government plans to import LNG to curtail the gas shortage. The imported LNG would cost $18 per MMBTU, more than four times the current wellhead gas price of $ 4 per MMBTU. This would result in a hike in gas tariff.
For more information, contact:
Lahore Chamber of Commerce and Industry (LCCI)
Lahore -54000, Pakistan
Category: Chambers of Commerce