KARACHI: Sui Southern Gas Company (SSGC) Managing Director Khalid Rahman has warned consumers, including domestic ones, of gas loadshedding.

Speaking to journalists from the print media at the SSGC head office on completion of his one year with the company on Friday, he said the utility was facing several challenges, including unaccounted-for gas (UFG). If the line losses could not be reduced, the SSGC would resort to loadshedding that had already started at some places in the interior of Sindh and was expected in Karachi within one-and-a-half months.

“We have been trying our best for quite a long time to bring the UFG under control but we are not even close to doing that,” admitted the managing director.

“The biggest reason for this is our old pipeline structure. There has also been a lot of unplanned growth in our distribution network, which we couldn’t manage too well. With the increase in population and construction, we have a 46,000-km distribution network, which is substantial. After 2011, we did impose certain restrictions regarding connections but now that has led to gas theft as new housing schemes come up,” he added.

“Our teams are out in the field catching the thieves. We haven’t been able to find a bad element inside but if we do the consequences would be very big. Still the problem is rampant,” the MD added.

Another problem that comes second to the UFG issue is cathodic protection of the gas pipes. “We need to protect the pipelines from corrosion,” he said.

Meanwhile, it was said that although distribution losses were aplenty, there were no losses in SSGC’s transmission network. Also, there has not been any major discovery of new gas reserves except at one or two fields such as Naimat Basal, from where 150 million cubic feet a day (MMCFD) is entering SSGC’s system, while 130MMCFD more is expected from the Kunnar Pasakhi Deep. “But then at fields like Badin, Sui, Zamzama, etc., there have been a constant decline in the gas. Therefore, the newly discovered gas balances that decline and we are left right where we were,” he explained.

The widening demand-supply gap eventually leads to SSGC implementing the government’s gas load management plan, that involved curtailing gas in winters to K-Electric by 100MMCFD and Fauji Fertilizer.

In addition, the company has been enforcing one-day industrial closure and three-day a week CNG closure to have enough gas available in the system. “Load management is a difficult subject. Fulfilling the demands of our domestic consumers is our priority, followed by the needs of the industrial, commercial and CNG sectors.

“We get several complaints about low gas pressure from all over, which increases in winter. But our high losses continue throughout the year, which include UFG that happens due to 58 per cent theft, 30pc leakages and 15pc gas lost due to inaccurate metering. We are working on pressure profiling, too, but if we can’t overcome or reduce our high losses, we will, with apologies to our good consumers, have to start gas load shedding. It has to be done otherwise the losses would keep on increasing. In fact, we have already started it in interior Sindh. And in Karachi, it is also going to happen after we finish working on a structuring plan for it,” he said. “Thanks to government subsidy, gas is cheap and since it is cheap it is taken for granted. People don’t feel a need to conserve gas,” he added.

The SSGC is also not doing too well as far as recovery is concerned. The MD said that Pakistan Steel and K-Electric were their major defaulters of dues. “Pakistan Steel owes us something like Rs38 to Rs39 billion, so in June we had to curtail their supply. Now we are giving them a minimum of 3MMCFD gas to just keep them running. As for KE, their dues started balooning from 2008 and 2009. But we cannot stop supplying them gas as that would affect their electricity consumers. Therefore, we offered them payment plans. They are complying with the new payment plan we offered them in 2014 but there is still this thing with them about not paying the late-payment surcharge. Anyway, the matter is in court now,” he said.

RLNG

Another of SSGC’s challenges, according to its MD, is the Liquefied Natural Gas (LNG) project. “The company is trying to import LNG to Pakistan. For this we have decided to bring in a third party. So we have gone into agreement with Engro regarding storage, re-gasification, etc,” he said.

He added that as per agreement, in the first year, 200MMCFD RLNG (Regasified Liquefied Natural Gas) would be transmitted and from year two 15,400MMCFD RLNG would be pumped into the company’s system. “We are also in the process of laying a 350km, 42-inch diameter pipeline from Pak Land to Sawan gas field. It’s a Rs60 billion project,” he said.

Finally, the journalists were informed that SSGC’s financial statements, which had not been published for some three years, because they didn’t have price determinations from the Oil and Gas Regulatory Authority (Ogra) on which to base their accounts, will now be shared in January (2011 and 2012 statements) and February (2014 and 2015 statements).

Published in Dawn, January 2nd, 2016