Strategic underground gas storage: Feasibility study to be completed by May

ISLAMABAD: Cognizant of the increased consumption of gas during the winter season, the government is working on establishing Strategic Underground Gas Storages (SUGS) and hopefully would complete its feasibility study by May, 2021.

"The construction of SUGS is part of the government's policy to improve energy security and affordability in the country," a senior official privy to petroleum sector developments told APP.

He said the development of the SUGS was aimed at meeting the country's growing domestic and commercial needs especially during peak winter months of November, December, January and February.

The underground facilities would be constructed in collaboration with the Asian Development Bank (ADB). Whereas, a consortium of European oil and gas equipment companies is leading the study.

Explaining the rationale for building the SUGS, he said Pakistan had considered building emergency stockpiles of gas "to deal with supply disruption amid the country's growing domestic and commercial demand especially in winter."

Recently, he said, all stakeholders held a meeting and agreed to expeditiously complete the study report on the methodology of underground gas storage till May 2021, so that availability of funds for facilities would be met in due course of time. "Final report will provide a blueprint for the facilities with respect to size, modulation and security supply of gas."

In 2019, the official said, Minister for Energy Omar Ayub Khan and Special Assistant to Prime Minister on Petroleum Nadeem Babar had discussed the SUGS with the ADB, who agreed to undertake a feasibility study for the project and allocated a grant.

Inter-State Gas Systems (Pvt) Ltd, a state-owned entity, would be the focal agency for the project.

Recently, the ADB has completed its competitive bidding process and appointed an international consultant for preparing a feasibility study. Project infrastructure could be funded through Gas Infrastructure Development Cess (GIDC).

The SUGS facilities are crucial for the country in view of the committed supplies of imported gas under the international gas agreements and fast-growing gas demand in the country to keep pace with economic progress.

The project would also significantly enhance Pakistan's capability to provide uninterrupted gas supply for sustainable economic growth.