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Pakistan's Punjab province braces for worst gas crisis

Publication Date : 12-10-2012

 

With over one billion cubic feet per day (1bcfd) shortfall of natural gas, the province of Punjab is going to be the worst victim in the coming winter, owing mainly to violation of approved policies committed by the government and the Oil and Gas Regulatory Authority (Orga).

Punjab’s shortage would continue to increase in the coming years to touch a whopping 1.6bcfd by 2015.

All fresh gas injections through proposed pipeline imports from Iran and Turkmenistan, liquefied natural gas and a couple of domestic augmentation would only compensate for the depletion in existing fields rather than providing net increase.

This was the crux of a presentation to a Senate Standing Committee on Petroleum by the MD of Sui Northern Gas Pipelines Limited (SNGPL) Arif Hameed.

He said that a proposal was under active consideration of the government to introduce a special higher winter tariff for industrial consumers and CNG (compressed natural gas) sector.

Hameed said the current gap between SNGPL’s demand and supply position stood at 566 mmcfd, and it would go up to 600 and 800 mmcfd in November and December to peak at 1000 mmcfd in January before easing down to 900mmcfd in February.

He said that since Khyber Pakhtunkhwa was exempted from sharing gas shortage because of application of article 158 of the constitution under a judgement of provincial high court, it would be the Punjab that would suffer the most with entire shortage to be applied in Punjab.

He said that gas shortage used to be equally shared by all the four provinces in the past, but article 158 of the constitution exempted Sindh, Balochistan and KPK because of their higher production compared with only 6 per cent gas production in Punjab, affecting the industry and economy of the province.

The official revelations at a meeting of the Senate Standing Committee on Petroleum was enough for senators to censure prime minister’s adviser Dr Asim Hussain and secretary of Petroleum for skipping the third meeting of the panel in a row to avoid scrutiny of mismanagement of economic problems and its political ramifications.

Senator Rozi Khan Kakar boycotted the proceedings in protest, others called upon the chairman Senator Mohammad Yousaf to refer the matter to the parliament for contempt of the parliament or order straight arrest of the adviser and secretary.

The data shared by Hameed also confirmed that most of gas shortages faced by the country were result of phenomenal expansion in gas transmission and distribution system and increase in number of gas consumers in four years of the current government to muster voters’ support rather than prudent commercial objectives of the utilities.

He said the SNGPL’s distribution network expanded by 56 per cent since March 2008 to about 87,800 kilometres, resulting in over 35 per cent increase in consumer base to about 4.174 million.

He said the company’s main transmission lines were also expanded by 1058km.

The company, he conceded, was under such a pressure that its target of 5000 schemes was exceeded by a wide margin to 6717.

The expansion schemes under Peoples’ Works Programme jumped by 49 per cent while parliamentarians schemes went up by 92 per cent as all schemes under Khushal Pakistan Programme were transferred to parliamentarians, resulting in over 63 per cent increase in SNGPL’s expenditure.

This involved a total expenditure of over 50.36 billion rupees (US$526.78 million), of which 11 billion rupees was contributed by the federal government and the company had to swallow a 31.2 billion rupees bill.

Responding to a question from Senator Abdul Nabi Bungash, the SNGPL chief said the CNG sector had seen an unusual growth and over about 2700 CNG stations were installed on the SNGPL system despite a ban imposed in 2008.

The Senators criticised the government and Ogra for giving top priority to such an expansion in CNG network despite an imminent gas shortfall.

Senators Hamza and Dost Mohammad Khosa criticised the government for allowing the people to invest billions of rupees in CNG stations and CNG kits without caring for more important sectors, like domestic, power and industrial consumers.

Senator Bungash said that gas companies had played a key role in poverty, illiteracy and resultant Talibanisation and terrorism in society because the government and the gas companies violated their agreements with local populations where gas was produced.

Senator Usman Saifullah Khan said that diversion of gas from power sector to CNG and others despite the fact that gas-based generation cost stood at Rs6 per unit while the government was purchasing electricity from power plants at Rs18 per unit on furnace oil.

He said the government should take a tough political decision as CNG owners are understood to have recovered their investment and earned profits in over two decades of business.

Arif Hameed also conceded that approved policy of the government and Ogra did not allow CNG stations within five kilometers on highways and within one kilometer in cities but this was largely violated.

He said the SNGPL always reported to the government the gas shortage with every expansion scheme for domestic or CNG stations, but when expansion schemes were cleared by the government or the Ogra, the SNGPL was bound to implement them.

He said most of the expansion schemes were approved by the top government offices.

*US$1=95.6 Pakistani rupees

 

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