ISLAMABAD: Ministry of Energy (MoE) has proposed supply of Re-gasified Liquefied Natural Gas (RLNG) to bulk consumers including Army messes subject to availability at OGRA notified tariff, well informed sources told Business Recorder.
Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGC) are two public sector gas utility companies engaged in the transmission and distribution/ sale of natural gas in the country under OGRA licenses.
Due to increasing gas shortfall, the then Prime Minister, in his directive of April 18, 2011, imposed moratorium on all new gas connections across the country for a period of six months which was further extended in October 2011.
RLNG prices reduced up to 1.31pc for August
Following was inter-alia approved with regard to gas connections to new housing schemes: “natural gas through the Sui transmission system will not be provided to high rise buildings and new housing schemes. These will be encouraged to energise their customers through LPG, LNG and alternate energy sources.”
Subsequently, the Federal Cabinet in its meeting held on April 12, 2017, while considering a summary submitted by Petroleum Division with following proposal, relaxed the moratorium on new gas connection based on Re-gasified Liquefied Natural Gas (RLNG): “moratorium on new gas connections for industrial, commercial, captive consumers, load enhancement of existing such consumers and new housing societies/ colonies may be relaxed enabling this Ministry to allocate RLNG volumes to these prospective consumers on as and when available basis’.”
Meanwhile, the Government, while taking cognizance of wide gap in gas supply and demand, imposed moratorium on expansion of domestic network and new domestic gas connection from December 2021.
The moratorium is also on connections of government offices, educational institutions, orphanages, armed forces messes, hospitals, etc., since these have been notified by OGRA under domestic category and are termed as bulk domestic gas connections.
Various applications for provision of gas to housing schemes, government offices, educational institution, army residential areas, etc., are being received directly or through gas utility companies; however, owing to subject moratorium, none is being entertained.
The availability of surplus RLNG and its further utilisation depends mainly on its consumption by power sector during the summer. Nevertheless, large variations have been observed in RLNG off-take by power sector against its demand. As a result, surplus RLNG is available when power does not off-take committed RLNG volumes and SNGPL ends up diverting those volumes to lowest tariff sector.
The net financial impact of RLNG diversion to domestic sector during the period July 2018 till Apr-2023 is Rs. 331.226 billion, while subsidy received to SNGPL in the matter is Rs. 85.692 billion. Hence, net negative financial impact on SNGPL is Rs. 245.534 billion.
In order to ease public pressure regarding provision of new gas connections and for effective utilisation of RLNG, Petroleum Division has proposed that new individual connections in housing schemes/ colonies and bulk domestic category, i.e., hospitals, government offices, educational institutions, orphanages, armed forces messes, etc., may be allowed on RLNG only, subject to availability, at the OGRA notified tariff.
Copyright Business Recorder, 2023