Gas theft surges to 380 million cubic feet per day

Gas theft is on the rise, as it surged to 380 million cubic feet per day (mmcfd) that is 200 mmcfd from Sui-Northern Gas Pipelines (SNGPL) and 180 mmcfd from Sui-Southern Gas Company (SSGC) systems, sources said. Sources in the Ministry of Petroleum and Natural Resources told Business Recorder that gas is being illegally utilised by all consumers including industrial, commercial and domestic.
Gas pipelines in Pakistan suffer from theft of nearly 380 mmcfd on average, of about 12.5 percent of total production, a ratio that is significantly lower than line losses in the power sector, but still high and rising, they added. The country at present is confronted with serious energy crisis. To manage the crisis the government has recently announced gas load management plan under which gas supply to CNG stations and industry is being suspended for three days a week.
Pakistan's current gas demand is met entirely through domestic production, which at present stands at 4,000 mmcfd. The level has been stagnant for the last few years as new gas field discoveries have been scarce and the cost of exploration keeps rising rapidly owing to the added burden of security.
According to Petroleum Institute of Pakistan's (PIP) estimates domestic gas production will decline to less than 1,000 mmcfd by 2026 as the existing fields are exhausted and the energy industry fails to find new ones to replace them. While new fields such as Zamzama and Manzalai have come online, they are much smaller than some of the older fields, such as Sui and Qadirpur, where gas production has started declining with each passing day.
One option currently being explored by the government is importing gas from Iran, which will add about 750 mmcfd to the country's supply. However, analysts warn that consumers must be prepared for its adverse impact on gas prices, as the gas will be at least three times more expensive than domestic production costs, causing overall gas prices to rise.
On the demand side, the power sector is the single biggest user, consuming 1,000 mmcfd on average, or about a quarter of total production, followed by industrial, commercial sector. Domestic consumers use up to 400 mmcfd, while CNG stations are consuming 250-300 mmcfd. "The gas theft law must be enacted on immediate basis to curtail ever rising theft. Employees of SNGPL and SSGC are involved in rampant gas theft," officials said.
According to energy experts, the primary problem is not theft or rising demand of gas, but its price, which is the cheapest fuel in Pakistan and now accounting for over half of the country's energy needs. The price, however, is lower than global market and not enough to justify investments by foreign companies who might otherwise be attracted to Pakistan.
Eliminating all cross-subsidies in gas pricing and making it similar to liquefied petroleum gas (LPG) and liquefied natural gas (LNG) is need of the hour. Lack of foreign investors is particularly debilitating in the sector that is reliant on increasingly sophisticated technology to extract hydrocarbons from fields that are getting smaller and more difficult to access. "Without the assistance of foreign investors, local companies cannot swiftly improve exploration and production," an analyst said. He added that the security situation in Balochistan is also a matter of concern for the oil and gas companies.