Continuous supply of 150MMCFD RLNG to KE: SNGPL urges PPL to explore possibility

ISLAMABAD: The Sui Northern Gas Pipeline Company (SNGPL) has warned that less retention of Re-gasified Liquefied Natural Gas (RLNG) by Sui Southern Gas Pipeline Company Limited (SGGCL) will have financial implications, suggesting PPL to explore possibility of continuous supply of 150 MMCFD RLNG to K-Electric to consume excess availability, well informed sources told Business Recorder.

The grave situation with respect to excess supply of RLNG to system of SNGPL has been brought to the notice of Directorate General (Gas) Petroleum Division.

In a letter to DG (Gas), SNGPL’s Chief Office, BD-Corporate, apprised that Sui Southern Gas Company Limited in a letter of February 21, 2024 communicated RLNG demand of 130 MMCFD for the month of July and August 2024. However, SSGC has retained on average 84 MMCFD during July as against 130 MMCFD, resulting in accumulation of surplus gas in SNGPL system.

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SNGPL has highlighted that due to accumulation of surplus, its opening system pack on morning of July 31, 2024 was 5050 MMCF, and further packing of over 100 MMCF the same the next day was unsustainable.

“Reduced retention of RLNG leads to packing of the system and potentially causes delays in discharge of cargoes incurring demurrage and leads to increase in RLNG diversion to domestic while SNGPL would bear the financial consequences,” SNGPL said adding that in case the retention of RLNG by SSGC is not increased as per demand, the resulting increased diversion cost shall be on account of SSGC.

SNGPL has requested Directorate General (Gas) to intervene and advise SSGC to ensure RLNG retention of 130 MMCFD going forward with immediate effect while recouping previously unconsumed volumes.

“SNGPL has also requested that PLL may be advised to explore the possibility to continue providing maximum RLNG to KE i.e. 150 MMCFD and beyond,” Chief Office, BD-Corporate said adding that these steps are critical for SNGPL to maintain system stability and avoid any operational and financial exposure.

In another letter on July 10, 2024, SNGPL informed Director General (Gas) that an excess of around 211 MMCFD was initially projected in September-2024.

The SNGPL requested the PLL and the PSO to shift cargoes to other higher-demand months. The PLL successfully arranged for the deferment of one cargo, however, such an attempt from PSO has not been fruitful as yet, despite repeated requests.

The SNGPL highlighted the excess RLNG in September 2024 is primarily due to the reduced demand from power, which was originally accounted for at the rate of 674 MMCFD at the time of ADP finalisation and later reduced to 456 MMCFD by NPCC in January 2024. To make the situation worse, NPCC (National Power Control Centre) , in its letter of June 07, 2024, further reduced power demand to 400 MMCFD in Sept 2024.

Therefore, even with PLL’s arrangement to shift a cargo to December 2024, SNGPL is still faced with a projected surplus gas of around 200 MMCFD in its system.

SNGPL argued that the required adjustment by PSO is critical to balance the demand-supply position during Sept 2024 and to avoid adverse impacts of potential high pressures on the network which can result in exposure of the country to take or pay charges/demurrages.

According to the SNGPL, it shall be forced to suspend supplies from indigenous sources as the last resort which will result in increased RLNG diversion to the domestic sector.

In light of the critical situation anticipated ahead, SNGPL sought DG ( Gas) intervention to take up the matter with PSO for shifting of a cargo from September 2024 to January 2025 so as to safeguard the SNGPL system and to avert any national crisis.

Copyright Business Recorder, 2024