ISLAMABAD: The Petroleum Division has arranged to provide gas to five export-oriented sectors in the SSGC’s system, a blend of available local gas with Liquefied Natural Gas (LNG) at the rate of Rs930/MMBtu for five months of winter season till the end of February 2021, in view of drastic drop in production of indigenous gas in Sindh. The decision was approved by the Economic Coordination Committee (ECC) on September 30, 2020, and will be rectified by the Cabinet on Tuesday’s scheduled meeting.
After February 2021, the supply of local gas will resume as per existing practice, when the demand from domestic sector get normalised in the SSGCL system, which serves Sindh and Balochistan.
The government approved upon this formula to protect the export-oriented industry in the SSGC system by supplementing the gas supply with LNG during winter after discussion with the industry.
For comparison, five export sector industries in Punjab are being provided LNG at the rate of USD 6.5/MMBTU (approx Rs1,080) as per agreement.
On Wednesday (September 30, 2020), a meeting of the Sindh Cabinet, reportedly turned down a proposal of the use of the RLNG in the province.
The provincial cabinet’s session chaired by Chief Minister Syed Murad Ali Shah, in a consensus decision, said Sindh should be given its rightful share of the natural gas of its gas-fields and not the RLNG as being recommended.
In an earlier statement, the Petroleum Division stated that presently, the terminals were running at full capacity and more LNG could not be moved from Port Qasim to Pakland, from where the distribution network of the SSGC drew its gas.
The same situation will happen in December and January.
So, to bring in more than 1200mmcfd, a proposed 17km line is essential.
There is sufficient capacity to move gas up to country for now. The same will happen in December and January.
The federal government can build 17km line but as it is the Sindh government’s property and requires right of way.
The Petroleum Division is anticipating that the Sindh may face a gas shortfall of over 400MMCFD in the coming winter.
Copyright Business Recorder, 2020
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