Sui Northern Gas Pipeline Limited (SNGPL) Managing Director 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 mismanagement and corruption and showing zero tolerance to the corrupt elements.
He stated this while speaking at the Lahore Chamber of Commerce & Industry on Wednesday. He 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. Arif Hameed further said that ban on new gas connections for industrial use was imposed by the government in October 2011.
He said that Unaccounted-for-Gas (UFG) losses of SNGPL are around 10 percent. It is a misperception that this 10 percent is composed of theft entirely. He said that the theft of gas is three to four percent while the rest six to seven percent are distribution losses. He said that these distribution losses are inevitable as Pakistan has one of the longest pipe systems.
He told the meeting 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.
Speaking on the occasion, LCCI President Ijaz A Mumtaz said the industry is burdened by the enforcement of GIDC through an ordinance and 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.
LCCI president 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 further said that the increased load shedding of gas in the winter would hamper the performance of industrial sector.
"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 maintained. He said that SNGPL does not have any solid plan to curtail UFG losses. The quantity of gas that gets wasted in the country is around 406 million cubic feet per day, ie 10.5 percent of the combined production of all gas fields in the country.
He said that the cost of this wasted gas is over 21 billion rupees and is enough to run a 1,500 to 2,000-megawatt power plant. SNGPL also needs to adopt zero tolerance against internal corruption and mismanagement, he added. LCCI president said that in order to curtail gas shortage in the country (which has gone beyond 50 percent of the existing supply), no appreciable exploration activities are carried out by SNGPL to make use of the indigenous gas resources in the country.
He said according to Ogra, the supply-demand gap which now stands at around two billion cubic feet per day 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 dollars per MMBTU, more than four times the current wellhead gas price of four dollar per MMBTU which would result in a hike in gas tariff.
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