SNGPL, since its 43 years of operation has become the largest integrated gas company serving in Pakistan with the principle activities of purchase, transmission and distribution on natural gas to consumers. Currently, SNGPL has more than 2.67 million customers, which are continuously increasing as the company in expanding its operations.
While extensive natural gas networks have been laid in the province of Punjab and NWFP, SNGPL's distribution activities now cover 831 towns and villages, organised through 8 regional headquarters namely, Bahawalpur, Multan, Faisalabad, Lahore, Guranwala, Islamabad, Abbotabad and Peshawar.
SNGPL was incorporated as a private limited company in 1963 and converted into a public limited company in January 1964 under the Companies Act 1913, now Companies Ordinance 1984, and is listed in all three stock exchanges of Pakistan.
The company overtook the existing Sui Multan System (217 Miles of 16 inch and 80 miles of 10 inch diameter pipelines) from Pakistan Industrial Development Corporation (PIDC) and Dhulian-Rawalpindi-Wah system (82 miles of 6 inch diameter pipeline) from Attock Oil Company Limited. The company's commercial operations commenced by selling an average of 47 MMCFD gas in two regions viz. Multan and Rawalpindi, serving total number of 67 consumers.
SNGPL has laid 6,200 km of high pressure pipeline ranging from 6' to 36' in diameter and serving around 2.67 million customers. Since its commencement, the company had undertaken 8 major projects and Project-9 is underway. Salient features of these projects are as under:
PROJECT 1 (1964 - 1969):
Projects 1 was undertaken to extend Sui-Multan section to Faisalabad and Lahore and then link it with Dhulian-Rawalpindi-Wah system to form a common grid. It involved construction to 708 km of pipeline and installation of 13,200 Horsepower (HP) compressions at four stations. The flow capacity increase from 90 to 170 MMCFD at a cost of Rupees 249 million.
PROJECT 2 (1970 - 1971):
This project was launched to increase the system capacity from 170 to 250 MMCFD, to cater for the needs of a new fertiliser plant near Lahore as well as the additional demand of the general industry involving construction of 156 km of pipeline and installation of additional 9900 HP of compression at a cost of Rupees 96 million.
PROJECT 3 (1971 - 1973):
Project 3 was implemented as a logical extension of Project 2. Under this project gas supplies were further extended to major cities in the NWFP. It entailed construction of 724 km of pipelines and additional 10,600 HP compression which resulted in augmenting the system capacity from 207 to 277 MMCFD at a cost of Rupees 416 million.
PROJECT 4 (1974 - 1981):
This project was undertaken to meet the increasing demand of power and fertiliser sectors and extended gas supplies to additional towns in the north. It involved erecting of 2 x 100 MMCFD purification banks at Sui installation of 34,700 HP compressions and construction of 357 km of pipelines at a cost of Rupees 1345 million.
PROJECT 5 (1985 - 1991):
Project 5 was undertaken to further enhance the system capacity to 450 MMCFD from Sui region. A purification bank of 120 MMCFD capacity and 787 km of pipelines were constructed under this project at a cost of Rupees 3260 million.
PROJECT 6 (1989 - 1998):
Up to Project 5 most of the gas was supplied from Sui gas field except for small quantities from gas from associated gas fields in the Potohar region in the north. SNGPL embarked on Project 6 to carry additional gas from Pirkoh, Loti and Kadirpur fields in the south to its major consumption centers in the north.
A total of 1200 km of pipeline was constructed and 53370 HP additional compressions were installed under this project at a cost of Rupees 18 billion. In addition to above mention to major expansion projects, several gas fields at different location were connected to the transmission system through a single line varying from 10 to 16 inches in diameter. Some looping and installation of additional compression was also undertaken between major projects to enhance system capacity.
PROJECT 7 (2001 - 2003):
In order to utilise the new gas discoveries in the south there was a need to expand its existing infrastructure system.
The major gas market is in Punjab and northern areas whereas the new gas discoveries are in the south. Therefore, to make the gas flow towards north, Project 7 was undertaken on a major augmentation and infrastructure development plan.
This plan was also initiated as per Government of Pakistan's priority to displace furnace oil with indigenous gas for major power stations near Multan.
A total of 580 km of pipeline, 25,000 HP additional compression and 04 Nos. River overhead crossing jobs were executed at the cost of Rupees 9,356 million.
PROJECT 8 (2003 - 2005):
Project 8 was undertaken to displace the liquid fuel in power plants with indigenous gas and to overcome capacity constraints to meet increasing gas demands downstream of Multan for Lahore and Faisalabad regions.
For this purpose additional 390 million cubic feet gas per day was made available to company from Sawan, Kadirpur, Mubarik and Kandhkot gas fields.
A total of 803 km of transmission pipeline with diameter ranging from 8 inches to 36 inches has been laid at the cost of Rupees 8.5 billion. After the completion of the project, system capacity has been increased to 1680 MMCFD.
THE GROWTH OF THE COMPANY IN THE PAST FIVE YEARS IS STATED IN THE FOLLOWING TABLE:
TABLE 1 GROWTH - LAST FIVE YEARS:
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2005-06
Estimated 2004-05 2003-04 2002-03 2001-02
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Sales Volume - MMCF 571,481 537,086 452,338 341,643 321,957
No of Customers 2,668,965 2,482,170 2,305,598 2,173,694 2,078,578
Power 10 10 10 9 9
Fertilizer 4 4 4 4 5
Cement 10 6 6 4 4
Industrial including CNG 3,749 3,251 2,861 2,653 2,531
Commercial 43,919 41,358 38,842 37,471 37,622
Domestic 2,641,273 2,437,541 2,263,875 2,133,553 2,038,403
System
Transmission Lines - Kilometers 6,195 6,121 5,776 5,759 5,405
Distribution Lines - Kilometer 46,671 42,285 38,284 35,814 34,093
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PROJECT 9 (2006 - 2008):
The basic objective of Project 9 is to absorb additional gas available from existing and new sources viz. Gurguri, Rodho and Zamzama and gas sources of Potohar region through system up-gradation with loopline and compression facilities enhancement.
The company will take up Project 9 during the years 2006 - 2008. It will be executed in two phases. The Phase 1 (advance action plan P-9) will include the construction of 140 km 24 inch diameter Gurguri - Kohat - Nowshera line.
This project will revolutionise the economic scenario of NWFP by making the province self sufficient in terms of energy requirements. The study on second phase has also been finalised and shall be submitted to the competent authorities for their approval.
SUPPLY OF CNG TO LILLA TOWN:
SNGPL has recently inaugurated the Lillah Town project which involves the revolutionary Mother-Daughter System as an alternative to pipelines for reaching the remote areas of District Jehlum. The budget for this project was Rs 140 million for two phases. Phase I has completed with a cost of Rs 53.70 million and Phase II will be completed during the FY 2006-07.
The operations of SNGPL are directed by the company's goals and values which have been the foundation of the company since the inception of the organisation. Besides executing quality work by achieving higher standards and environment friendly attitude, the corporate social responsibility is kept as a core essential while planning projects of providing economic forms of gas, in the best interest of the people, as per directives of the Government.
The Company has replaced furnace oil imports through distribution of additional gas during 2002 to 2006, saving Foreign Exchange worth US $8 billion over the last four years.
It will be seen from the above table that the Company through effective financial and managerial measures, improved the contribution towards exchequer through sales tax and income tax over the period. The capital investment has almost doubled over the last five years out of own generation of resources and not borrowing even a single penny during the last three years. The number of consumers especially the industrial, commercial and CNG have geometrical progression over past years.
The company has also contributed positively to the exchequer through high earnings per share as well as enhanced dividend to the shareholders. The Company has also replaced imported furnace oil through collection of natural gas from every source wherever it has been discovered within Pakistan and has delivered it to its consumers through the vast network of high pressure transmission lines, distribution mains and distribution network.
The liquidity of the company has improved significantly over the last five years. As on 30th June 2006 cash and time deposits of Rs 15 billion were recorded in addition to further borrowing capacity of Rs 19 billion which could have been borrowed in accordance with the prudential regulations without disturbing the debt equity ratio of 70:30.
Currently the total asset base of the Company is around Rs 80 billion after discharging all its liabilities as and when fall due. With further discoveries (if any) the company has unlimited demand of gas for industrial, power generation, commercial, CNG and domestic consumers within its licensed areas until the exclusivity of the licensed period is over.
TABLE 2 FINANCIAL RESULTS:
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Rupees in million
2005-06
Estimated 2004-05 2003-04 2002-03 2001-02
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Sales 107,897 84,710 64,276 45,649 42,005
Capital Investment 5,591 7,433 6,174 6,616 5,163
Sales Tax paid 14,697 12,777 9,729 6,847 6,301
Income tax 1,534 1,525 1,367 1,193 877
Profit after tax -
(9 months/2005-06) 3,257 2,755 2,297 2,014 1,887
EPS - Rupees per share (9 months/2005-06) 6.52 5.52 4.60 4.03 3.78
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