ISLAMABAD, June 5: Pak-istan and the World Bank formally signed here on Tuesday an agreement for $200 million funding for the natural gas efficiency project aimed at enhancing supply of gas by reducing physical and commercial losses of gas in the pipeline system.

Secretary of Economic Affairs Division Waqar Masood Khan and World Bank Country Director Rachid Benmessaoud signed the loan agreement while Yousuf Ansari, Sui Southern Gas Company Ltd (SSGC) inked the project agreement with the World Bank country director. SSGC will implement the project.

The projected to be completed in five years will help check unaccounted for gas (UFG) in the gas distribution system, including system segmentation and pressure management, pipe replacement and repair, cathodic protection, and advanced metering systems.

An appliance efficiency pilot project will be initiated to finance modern, energy-efficient gas appliances for residential consumers, and improving the organisational capacity of SSGC and customer orientation.

Officials say that the project will help increase supply of gas to consumers, maintain adequate gas pressure, ensure better service delivery to consumers and improve the efficiency of SSGC.

In addition, the project would also help curtail emission of greenhouse gases through avoidance of direct methane gas leakages into the atmosphere.

A World Bank analysis shows that UFG is the difference between the total volume of metered gas received by a gas utility during a time period and the volume of gas metered as having been delivered to its consumers, excluding the utility‘s self consumption. In Pakistan UFG was recorded at 10.64 per cent in 2011. UFG is typically 1 to 2 per cent worldwide.

UFG is therefore a major contributor to the gas supply crisis, it says.  The dollar equivalent of Pakistan‘s UFG in 2010-11 was $323 million in terms of gas purchased and a petroleum substitution value three times higher if the volume of lost gas would have been channeled to power generation, the analysis notes.

In the residential sector, inefficient appliances are estimated to cause gas waste on the magnitude of 30 to 40 billion cubic feet per year, and even higher wastes are estimated in the industrial sector.

The household gas appliance industry in Pakistan generally produces low-efficiency appliances that do not meet the Pakistan Standard of 2008, which dictates minimum thermal efficiency requirements for a number of gas appliances.