Sui northern Gas Company warns of serious gas shortages in winter

Lahore, July 09, 2012 (PPI-OT): The MD SNGPL Arif Hameed has warned the industry of serious gas shortages in winter this year stating that the gas tariff would also be revised upward to speed up exploration.

The MD was speaking at the Lahore Chamber of Commerce and Industry on Monday. LCCI President Irfan Qaiser Sheikh updated the MD about industrial meltdown due to gas cuts while Senior Vice President Kashif Younis Meher, Vice President Saeeda Nazar, former LCCI Presidents Mian Mohammad Ashraf, Tariq Hameed, Iftikhar Ali Malik also spoke on the occasion. The Chairman SNGPL Mian Misbahur Rehman, who is also a former President of the Lahore Chamber of Commerce and Industry also attended the function.

Arif Hameed said that a massive gas loadshedding awaits industrial consumers this winter as the province faces a severe gas deficit at the moment. Currently, the country is facing an acute shortage, which would further jump up during upcoming December and January. He said that in the new gas policy, the gas tariff would be improved to facilitate gas exploration in the country. He, however, said a number of projects are well on way to introduce LPG as an alternate fuel.

The SNGPL is advising the new Housing Societies to put up LPG plants as there is moratorium on supply of gas to new industrial units and residential societies.

Arif Hameed admitted that due to high gas tariff, the pilferage of gas has increased but the SNGPL has introduced new technology to detect theft.

On Pakistan-Iran gas pipeline project, the MD said that tenders for the said projects have been already issued that make the point the government is working on the project efficiently.

Speaking on the occasion, the LCCI President Irfan Qaiser Sheikh said that the shortage of natural gas has become a burning issue for the industries as last year the industry was provided gas for only 180 days and there is a need to find out new reserves as current gas reserves are depleting fast and it will become insufficient to meet the national demand in future.

He said that the SNGPL has done a good job on gas theft issue but the current line losses are over 10% which are too high as compared to 4% in recent past. “The LCCI understands that minimizing the pilferage can result in more revenue collection as well as fair load management.”

It has been seen that SNGPL is expanding its system without considering the increasing gap of gas supply and demand. Gas shortfall is estimated to reach 2.5 BCFD in 2014-15, 3 BCFD in 2015-16 and 3.5 BCFD in 2016-17. Hence, the gap is likely to shoot up to 5 BCFD in 2020-21, unless major gas discoveries and field developments are made.

Irfan Qaiser Sheikh said that the LCCI members often complain of the rigid behaviour of the staff of SNGPL with regard to imposing penalties unilaterally. Without serving any show-cause-notice to the clients, their meters are disconnected for lab testing. The LCCI suggests that the concerned clients should be informed before taking any action and there should be third party testing or inspection.

Despite making number of complaints about low gas pressure, there are still many industries that are suffering to a great extent. Their whole lot/batch gets wasted and they remain under this fear while making productions.

He said that the investment in gas exploration and extraction is seriously lagging behind demand trends. As a result the country continues to rely heavily on fuel oil. It is suggested to restructure Pakistan’s gas sector to make it more efficient and to attract private sector investments.

The reserves at Kunar Peshaki near Hyderabad could produce 280mcf of gas per day. These reserves could be vital to improve the supply position and bridge the present shortfall. There are known gas reserves at Kohlu as well. This huge reserve cannot be put on the back burner and needs to be explored immediately as it is sufficient to meet Pakistan’s energy requirements for several years.

Moreover, Gas used in the steam units should be diverted to combined-cycle plants that operate at an efficiency of 48%, compared with around 30% for the existing steam units.

The prices of LNG must be brought down to provide alternate fuel to the general public. Moreover LNG filling stations must be introduced as this would help in reducing the demand for natural gas to some extent.

He said that Pak-Iran Gas Pipeline Project can rescue Industry from these crises. The work on construction of 785 KM gas pipeline should be accelerated on emergent basis. Initially, it will bring around 750 million cubic feet per day (MMCFD) of gas, which will gradually be increased to over 1.5 billion cubic feet per day (BCFD).

For more information, contact:
Shahid Khalil
Information Department
Lahore Chamber of Commerce and Industry (LCCI)
Lahore -54000, Pakistan
Tel: +9242 111 222 499
Fax: +92 42 636 8854