ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has directed Petroleum Division to put a proposal for uninterrupted gas supply to M/s Fatimafert (Sheikhupura plant) and M/s Agritech Mianwali throughout the year, official sources told Business Recorder.

The ECC gave these directions at its recent meeting presided over by the Finance Minister, Senator Shaukat Tarin when allocation of gas from Mari (Deep) gas reservoir to M/s SNGPL came under discussion.

Petroleum Division submitted the following proposals for consideration and approval of the ECC in supersession of earlier ECC decisions of May 17, 2018 and March 20, 2019: (i) up to 110 MMCFD gas from Mari Gas reservoir may be allocated to SNGPL till June 30, 2024 on firm basis; (ii) both MPCL and SNGPL would be required to negotiate the terms of supply under the agreement/term sheet; (iii) continuation of gas supply beyond June 30, 2024 would be subject to review of gas availability for which a new proposal would be submitted to the ECC for consideration; and (iv) OGRA to determine the price of gas under the relevant applicable pricing regime/ policy.

During the ensuing discussion it was noted that Power Division had supported the proposal and further suggested that SNGPL may consider supplying 25 MMCFD gas to 117 MW GTPS power station Faisalabad which is placed in higher merit order. The Petroleum Division did not agree with the Power Division’s proposal on the pretext that the GTPS has a power plant with lower efficiency of only 27 per cent.

The Ministry of Industries & Production requested that gas from Mari Gas Field may be provisioned through SNGPL to Fatima’s Sheikhupura Plant and Agritech for continued operation of both these plants throughout the year.

In January this year, Ministry of Industries and Production had proposed to the ECC to allow operations of SNGPL-based plants (i.e., Fatimafert Sheikhupura plant and Agritech) for a further two months, i.e., Feb-March 2022 at gas rate of Rs 839/ MMBTU.

NFDC estimated that local production of 100,000 MT would be beneficial to the national exchequer against same quantity imported by Rs 12.69 billion (if gas price to plants is at Rs 805/MMBTU), whereas if gas price to plants is Rs 839/MMBTU, local production would benefit by Rs 12.79 billion.

Copyright Business Recorder, 2022