Ogra may approve 200,000 new gas connections

Oil and Gas Regulatory Authority (Ogra) is likely to approve 200,000 new gas connections in the two gas utilities Sui-Northern Gas Pipelines (SNGPL) and Sui-Southern Gas Company (SSGC) for 2016-17, officials said.
According to senior officials Ogra has assured SNGPL that it would allow installation of 0.5 million new gas connections against 0.3 million approved last year. While new gas connections on the network of SSGC is a routine matter as there is no pendency, yet on the network of SNGPL over 1.1 million applications were pending for new gas connections, official added.
There was a ban on new gas connections during the tenure of the PPP-led coalition government however in 2016 the ban was lifted on the Prime Minister's as well parliamentarians' schemes which would require the two gas utilities to arrange Rs 20 billion either from the private banking sector or with government assistance through gas price rise effective November 15. Insiders however told this correspondent that PML-N parliamentarians and those of its allies are favoured over those parliamentarians who belong to the opposition.
An estimated Rs 10 billions natural gas was stolen on SNGPL's network especially in gas producing districts of the Khyber Pakhtunkhwa (KP), sources further revealed. Officials maintained that during the tenure of the current government SNGPL had provided over one million new gas connections by adhering to the principle of first come first served.
When the official was asked about the gas supply/demand situation and the provision of new gas connections, he said SNGPL was facing 700 Million Cubic Feet per Day (MMCFD) gas shortage as supply is 1.4 billion Cubic Feet per Day (BCFD) against demand of 2.1 BCFD which would intensify with a decline in temperatures.
Regarding the inauguration of new gas schemes by the Prime Minister, the official said gas supply to such areas would be possible within a year, subsequent to connecting new gas discoveries with transmission lines and shifting of local gas based power plants on imported Liquefied Natural Gas (LNG).
By the end of 2017 another LNG terminal will become operational with a capacity to handle 600 MMCFD of imported gas which will be dedicated to power and industrial sectors; consequently the government will be in a position to provide additional gas connections. Around 500 MMCFD of discovered gas from new wells which has not yet been linked to the distribution network, will come into the system soon and enable the authorities to better manage the gas demand situation.
The officials revealed that the gas utilities were facing financial losses as Ogra has rejected their request to enhance Unaccounted-for-Gas (UFG) benchmark from 4.5 percent to 7.5 for SNGPL and 7 percent for SSGC. Due to high losses, the SNGPL will have to face Rs 7 billion loss, while the SSGC will bear Rs 13.8 billion financial loss, they maintained.
The gas companies plan to invest over Rs 71 billion during the year: Rs 13.9 billion on transmission projects, Rs 32.8 billion on distribution and Rs 24.5 billion on other development projects.