ECC shelves installation of all LPG mix supply plants

The Economic Coordination committee (ECC) of the Cabinet has shelved the execution of the already ECC approved new liquefied petroleum gas (LPG) Air Mix supply Projects by the Sui companies.

In a letter to the Sui companies, the Petroleum Division stated that the ECC headed by Advisor to Prime Minister on Finance Abdul Hafeez Shaikh decided to shelve installation of all LPG Mix Supply Plants (approved by the ECC) on which work has not been started as yet excluding two already commissioned LPG Air Mix Plants at Awaran and Bella, and a plant near completion in Gilgit.

The ECC also directed the Petroleum Division to submit a proposal in consultation with the provincial government of Balochistan for cost-effective provision of the LPG for the less-developed area of Balochistan, to the ECC for consideration.

The Sui Southern Gas Company (SSGC) is also directed to submit its proposal on construction of the LPG Air Mix Plant.

The Petroleum Division moved the summary on March 18, 2020 for the approval of the ECC on the recommendations of the Senate Standing Committee on Petroleum.

Following the policy decision of the federal government, the SSGC planned setting up LPG air mix plants in remote areas of Sindh and Balochistan where conventional pipelines could not be laid.

"The cost of Air Mix plants are very high and gas tariff for remote area consumers of Balochistan and Sindh are relatively high," the sources said.

Gas shortfall in the country is estimated to jump by 157 percent to 3.7 billion cubic feet per day (bcfd) in the current fiscal year 2019-2020. Total 700,000 consumers were added last year.

The estimate has been made by the Oil and Gas Regulatory Authority (OGRA) that put the gas shortfall increasing almost continuously every year to 6.6bcfd by financial year 2028.

In the financial year 2016, the board of the SSGC conceptually approved the construction of 30 LPG air mix plants. Ten plants are currently under construction and management is confident to complete all these plants by 2020.

The gas utility invited bids for the engineering, procurement, construction and commissioning of 10 LPG air mix plants in Uthal, Kharan, Khuzdar, Washuk, Killi Khanozai, Loralai, Qilla Saifullah, Kech Turbat, Muslim Bagh, and Zhob.

The government had planned to install LPG air mix projects to provide gas to the consumers in some parts of the hilly areas. The projects include LPG storage facility, installation and commissioning of plants, civil works and distribution network.

Since air mix gas is of low pressure, it does not require high cost to set up pipelines on the hilly areas of Balochistan.

The SSGC is also in a process of hiring consultancy services for the LPG/NGL and propane extraction plant as the gas utility company intends to evaluate the feasibility of a gas processing facility for extraction of the LPG, the NGL and propane.