Non-gas producing districts of Sindh: SSGC imposes moratorium on new gasification schemes

Sui Southern Gas Company (SSGC) has imposed moratorium on new schemes of gasification of villages and towns of 13 non-gas producing districts of Sindh, well-informed sources told Business Recorder here on Wednesday.
The moratorium has been imposed by the SSGC after receiving new policy guideline from Ministry of Petroleum and Natural Resources, approved by Prime Minister of Pakistan, regarding gas supply and same have been communicated to Sindh Government through recently.
After the decision, people of the villages and towns (still without gas facility) of districts Matiari, Tando Mohammad Khan, Tandoallahyar, Benazir Bhuttoabad, Naushehroferoze, Kashmore-Kandhkot, Shikarpur, Jacobabad, Thatta, Mirpurkhas, Umerkot and Tharparkar would remain without gas till the moratorium is lifted, sources said.
The areas in the outskirts of Karachi, which are still without gas facility, would also come under the ban, they added.
The SSGC letter written to Malik Israr Hussein, Additional Chief Secretary (Planning and Development), a copy of which is available with Business Recorder, states: "SSGC has recently received a new policy guideline from Ministry of Petroleum and Natural Resources, approved by Prime Minister of Pakistan regarding gas supply to New Development Schemes (including new towns/villages/localities)."
"In the light of present energy crisis in the country, SSGC is performing a key role of providing natural gas to industrial, commercial and domestic customers. Its financial health is steadily deteriorating due to imposition of financial penalties on account of Unaccounted for Gas (UFG) benchmark set by the Oil & Gas Regulatory Authority (Ogra). This is eroding the financial strength of the company," the letter added.
"Gas distribution companies were established in mid 1950s (Karachi Gas and Indus Gas Company) and pipeline network was laid in the urban areas like: Karachi, Hyderabad, Sukkur and others. The existing gas distribution pipeline network has now become overloaded and dilapidated, requiring massive rehabilitation/reinforcement of deteriorated segments. UFG control is now the prime objective of the company. In order to address the issue of UFG, the company has planned to undertake a large capital investment project for rehabilitation of pipelines, up-gradation of CP and metering systems (approximately Rs30 billion in 5 years) in order to bring down the UFG to acceptable level. This will require deploying all financial and technical resources to achieve the task in time, not to only avoid further penalties by Ogra, but also to help in improving the energy situation of the country by saving precious gas. Accordingly, all internal funding arrangements will need to be directed towards achievement of this objective," it said.
The latest progress report of new towns and villages implemented under three loans from government of Sindh amounting to Rs 2900 million. It will be evident from the overall summary that during December 2009 to October 2011(22 months duration), SSGC has completed the schemes of 340 towns and villages at a total cost of Rs1890 millions by laying 823 km of various diameters of pipelines, while work is in progress on 95 schemes worth Rs780 millions (totalling to Rs 2670 million) which is expected to be completed by March 2012. The remaining schemes of Rs230 millions will be executed during January-June 2012, the letter added.
"The prime minister has imposed ban on New Development Schemes throughout the country except those districts where gas is produced. Therefore, SSGC could not implement the schemes located within the Non-Gas Producing Districts of Sindh after the moratorium," the letter disclosed.
In view of above situation, the company is not in a position to undertake new development schemes in new towns and villages in the provinces, especially under the Loan Agreement with Government of Sindh.
"SSGC is continuously receiving approvals for new schemes pertaining to all Districts of Sindh from your Office, which may kindly be discontinued, in view of the present policy approved by the prime minister until such time the moratorium is lifted or a policy change is communicated," the letter added.