ISLAMABAD: Gas shortage and pressure drops have hit various consumer groups, particularly in Punjab and Khyber Pakhtunkhwa, leading to major supply cuts to power and transport sectors and captive plants in the industry.

Besides usual drop in temperatures that increase gas demand in the residential sector in December, a delay in arrival of an LNG import vessel scheduled for Friday last week and higher gas retentions allowed to Sui Southern Gas Company Limited (SSGCL) for K-Electric aggravated the situation.

This will be followed by closure of canals starting next week for annual maintenance. It will significantly reduce power generation from cheaper sources and may require furnace oil and diesel to sustain power supply. The Indus River System Authority has already announced the schedule for closure for maintenance of canals from Dec 26 to Jan 31.

Petroleum division sources told Dawn that line-pack of the SNGPL (Sui Northern Gas Pipelines Limited) network was hovering between 4,100 and 4,300 million cubic feet (mmcf) due to lower supplies from the SSGCL network. About 4300mmcf is minimum benchmark for safety reasons to maintain gas pressures.

Canal closure this week will further reduce generation from cheaper sources

Officials said that an LNG vessel of Pakistan LNG Limited (PLL), which was due at Port Qasim on Dec 18, got delayed and was expected to be available for re-gasification (RLNG) by Dec 22. This impacted the SNGPL supply by about 150 million cubic feet per day (mmcfd).

SSGCL was earlier retaining about 200mmcfd to meet its requirements for K-Electric and gas consumers which was later reduced to 160mmcfd on distress calls from SNGPL to sustain line-pack. Overall, SNGPL was getting about 1050mmcfd RLNG, instead of 1200mmcfd, from the LNG terminal, which further came down to 850mmcfd in the wake of about 160mmcfd retention by SSGCL.

As a result, the gas supply to power stations has been reduced by one-third to 170mmcfd from 250mmcfd, while 35mmcfd of gas supply to the non-export-oriented industry has been stopped. Likewise, supply to CNG stations in Punjab has been completely stopped, while efforts to reduce supply to CNG stations and some other industries in KP’s high loss (up to 50 per cent) areas of Kohat and Bannu have been foiled by some sitting ministers.

As such about 60mmcfd is still being utilised by the KP transport sector on the premise of 18th Amendment quota. Supply to fertiliser plants — Fatima and Agritech — had already been stopped a few days ago.

Taking into consideration unaccounted for gas (UFG) losses, about 400mmcfd LNG practically became available to the SNGPL system for residential consumers against a demand for 850-1000mmcfd. An official at SNGPL confirmed that the company was getting about 1700-1750mmcfd (both domestic gas and LNG) against 2,100mmcfd of usual supplies these days, leaving an overall shortfall of 300mmcfd. As a result, the company was getting low pressure complaints from tail-end consumers almost across its network.

The official complained that LNG retention by SSGCL had developed SNGPL’s receivables by Rs50 billion. On the other hand, he said, injection of LNG into the distribution network to meet the demand of residential consumers had cost the company over Rs80bn that still remained unpaid from last year, while another Rs32bn would be added this year.

The gas cuts followed Dec 16 order from the energy ministry’s petroleum division with the approval of the federal cabinet and the Cabinet Committee on Energy (CCoE). “In order to meet the demand of high priority sector M/s SSGCL and SNGPL would curtail gas supplies to CNG, general industry (non-export), captive power plants (non-export) and captive power plants (export) which are connected to power grid and can meet the requirement of their power generation,” said the order.

The power division had also been directed by the CCoE and the cabinet to explore further reduction in RLNG off-take during December 2020 and January 2021 and this would not attract penalties or liquidated damages for non-supply of RLNG by SNGPL.

The committee also ordered that “efforts would be made at the end of SSGCL for transportation of additional gas volumes to SNGPL, if available, after revival of Shut-in wells by end of December 2020 i.e. up to 90mmcfd for SSGCL and 16mmcfd for SNGPL, respectively”.

Also, Mari Petroleum Company (MPC) was asked to supply unutilised gas volumes of Guddu Thermal Power Station to SNGPL purely on “as and when available basis” (up to 15mmcfd (phase-I) in December, 2020 and up to 50mmcfd (phase-II) by early January 2021 subject to installation of compression facility by MPC by utilising available pipeline capacity of Pakarab Fertiliser.

The Oil and Gas Regulatory Authority has been directed “to expeditiously clear the regulatory approvals, if required, for this transaction to bring gas in SNGPL’s system by January 2021”.

Both gas utilities — SSGCL and SNGPL — have been directed that “there will be no planned curtailment of gas supply to domestic sector”, while there would be no planned curtailment of gas supply to the export industry. In case of emergency, supply to captive units of the export-based industry may be curtailed one day a week at the end of December 2020 and beginning of January 2021.

The order said the federal cabinet had directed that no new gas connections be allowed to industrial units solely for power generation through domestic gas or LNG where grid connectivity was available.

The officials said a project was being undertaken at a cost of Rs9bn for high loss areas of Bannu and Kohat for laying pipelines to provide new connections to tens of thousands of consumers with the hope that they would pay bills.

Published in Dawn, December 21st, 2020