LAHORE: The Sui Northern Gas Pipelines Limited (SNGPL) has failed to utilise its annual quota of 500,000 new gas connections for the past seven years due to various technical issues.

On the other hand, the Oil and Gas Regulatory Authority (Ogra) has directed the SNGPL “covering a vast area of Punjab, Islamabad, Khyber Pakhtunkhwa and Kashmir” to give, while providing new connections, priority to the schemes (in residential areas) approved since 2011 onwards, Dawn has learnt.

“As of March 2021, the total pendency (most of domestic category) of new connections was around 2.8 million. And I think it has now crossed the figure of 3m, which includes a number of applicants seeking gas connections on an urgent basis on the payment of Rs25,000 (each connection) in addition to the demand notice fee, other charges, etc,” an official said on Saturday on condition of anonymity.

The main reasons behind non-utilisation of the annual quota fully included continuous decline in the indigenous gas (Sui) production, delay in exploring new gas reserves, increasing population and the new housing schemes and lack of capacity to install new connections under a fast-track policy, the official explained.

According to Ogra’s August 17 decision on the SNGPL’s petition of March 22, the regulator examined the data in depth and learnt that of the total 3.5m new connections allowed to the company in the last seven years, 2.53m were provided to the applicants in all regions.

“Examination of the last seven years’ data indicates that the petitioner has been able to install 2.53m gas connections against 3.5m allowed in total, thus more than 969,000 of gas connections limit remained unutilised only during last seven years besides total admitted pendency of 2.8m applications,” reads Ogra’s decision on the company’s petition on the estimated revenue requirement for the 2021-22 financial year.

While announcing its decision, Ogra said: “In view of the foregoing, the authority hereby grants principle approval to the petitioner to provide new gas connections in respect of ongoing schemes, where priority should be given to such schemes approved since 2011 onward and are more than 50pc complete. Moreover, the petitioner is required to ensure planning for the extension in the network including provision of new gas connections without prejudice to the following; the petitioner may undertake combing connections within its already served areas on priority and in order of economy, provided the cost of such connections is within the government approved per consumer cost criteria as may be decided by the management and its board of directors.”

The authority said that since the exclusivity of the gas companies to develop gas development schemes in their franchised area ended in 2010 and the authority vide its decision this year has referred the matter to the federal government to formulate a policy for award of new gas distribution network projects in new towns and villages through some competitive mechanism to facilitate the new entrants, the petitioner is therefore directed to take cognisance thereof.

Ogra also advised the SNGPL to ensure that addition of new gas connections/development schemes shall not further affect security and continuity of gas supplies to existing customers and arrange sufficient additional gas supplies for the new connections.

Moreover, there should not be any financial impact on the existing customers.

The company had applied to Ogra for the provision of 1.2m new connections per annum (from now onwards) to clear the backlog despite the fact it could not utilise its annual quota/limit of installing 500,000 new connections, including 10pc cases on an urgent basis.

“We are in touch with Ogra and soon the issue related to the SNGPL’s plan of providing 1.2m connections per year about which the regulator did not express anything would be settled,” said another official.

When contacted, SNGPL Managing Director Ali J. Hamdani said he was yet to study the Ogra’s verdict in detail. “It is a detailed verdict of several pages and I will discuss this with you soon,” he said.

Published in Dawn, September 5th, 2021