SNGPL, SSGCL tasked to set up 30 LPG air-mix plants

The two state companies, Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL), have been given task to set up 30 Liquefied Petroleum Gas (LPG) air mix plants to cater the domestic gas needs, sources said.

Sources maintained that the plants are aimed at providing gas facility to the population in the areas where facility of natural gas is not available and discouraging deforestation. At the plants, the LPG will be mixed with air to produce synthetic gas for onward supply to the consumers through distribution networks like natural gas.

Source said the federal government will install LPG Air Mix Plants at Noukandi, Dalbandin and Chaghi before the end of current financial year. Sui Southern Gas Company Ltd is in the process of floating tenders to set up 10 LPG air-mix plants in selected areas of Balochistan to facilitate consumers where natural gas supply does not exist.

As per the instructions of SSGC Board, the process of setting up the first lot of 10 LPG air-mix plant is in progress. Currently, the tendering process through open competitive bidding for the plants is in progress.

The PML-N government had approved the installation of 30 LPG-air mix plants each on the networks of SNGPL and SSGC across the country. The plants were proposed to be set up in Murree, Gilgit, other hilly areas in the north and Azad Jammu and Kashmir (AJK) where the laying of natural gas distribution network was not considered economically feasible.

In order to lessen cross-subsidy impact, the tariff for LPG-air mix supply to consumers was set at Rs 600 per million British thermal units (mmbtu) - the highest slab for natural gas supply to domestic consumers till October 2018. Later, the government revised tariff slabs for the domestic consumers and pushed the highest slab up to Rs1,460 per mmbtu from Rs 600 per unit.

Per-unit generation cost for SNGPL and SSGC LPG-air mix plants was calculated at Rs 3,132 and Rs 4,640 respectively, which were much higher than the gas tariffs for domestic consumers who were paying Rs 138 per mmbtu under the lowest slab and Rs1,460 per mmbtu under the highest slab.