ISLAMABAD: The federal government has dismissed the Sindh chief minister's contention that the province was producing 2,500mmcfd gas but getting only 1,000mmcfd, and accused him of giving "political colour" to a serious economic issue.
Speaking at a news conference, Special Assistant to Prime Minister on Petroleum Nadeem Babar along with Minister for Information and Broadcasting Shibli Faraz held the Sindh government responsible for delay in the construction of 17-kilometer gas pipeline for transportation of LNG from terminal, and stated that only after permission was granted by the provincial government in the third week of Oct 2020, construction of pipeline has been completed two days ago.
He said the federal government has been requesting the provincial government for one-and-a-half years, and if the permission was given two to three months ago, the federal government would have been able to arrange additional gas.
"We have arranged 12 cargoes for the month of January 2021 to meet the domestic gas requirement, which increases at this point in time 2.5 times higher compared to summer in the SNGPL system, and two times higher in the SSGCL system. Last week of December and the first two weeks of January is peak period of gas demand," he added.
He said the Sindh chief minister had written a letter to the prime minister, and claimed that the province was producing 2,500mmcfd gas and was getting only 1000mmcfd.
"The Sindh chief minister has deliberately given a political colour to a serious economic issue as he had actual numbers of gas production presented to all the provinces during a CCI [Council of Common Interests] meeting in August 2020 with him," he stated and added that the CM informed the provinces during a CCI meeting that in June 2020 actual sellable gas production in Sindh was 2,025mmcfd, and 1,562mmcfd was being consumed directly in Sindh province.
As out of the total gas produced in Sindh 463mmcfd of gas was going into the NGPL system, 202mmcfd of gas was being provided by the SNGPL to power and fertiliser plants in Sindh and an additional 150mmcfd LNG was also being provided to Sindh.
He said the chief minister further stated in his letter that the provincial government did not recognise the gas provided by the fact about the federal government to a power plant or a fertiliser plant in the province.
Babar said that this was quite interesting because those allocations were made either by the Musharraf government in its last years or the PPP and the PML-N governments.
He said since the present government assumed the office, if gas is discovered in Sindh or any other province it is automatically allocated to the SSGCL or the SNGPL, and this has been made a process for the last two-and-a-half years.
He further stated that the Sindh chief minister's whole point of view appears to be that the province does not want LNG because its price was high and wants to use all the gas produced by the province.
"This is not possible as the entire system in gas and electricity is centralized, and referred to the CCI meeting of November 11," he said and added he informed the provinces that five Discos in Punjab have been performing better in terms of line losses and recovery as compared to the Discos in Sindh, the KP, and Baluchistan but the government decided to maintain a uniform power tariff across the country and same is applicable to the gas sector as well.
"Therefore, to say that this was not acceptable to Sindh is not appropriate," he said and added that the federal government was preparing a strategy in consultation with the CCI forum to provide gas to all.
On the supply situation, local production is on rapid decline with net gas shortage of five to seven percent, and this shortage is being bridged through import of LNG, he said.
He said both the terminals are of 1,200mmcfd and these terminals were being run at full 1,200mmcfd capacity, adding that arrangements for January 2021 have also been made and average price of LNG for December and January is US$6.34 compared to over US$8 for the same months three years ago.
"We have arranged 12 cargoes for the month of January 2021, and as per load management policy there is no planned gas load shedding for export sector, domestic and general industry, however, there is pressure issue at the tail ends due to expansion of the network," he said.
The gas supply to CNG stations and captive power units is being curtailed for three to four days and this would continue for the month of January as well.
On the issue of purchase price of LNG, Babar said it would be unfair to compare spot purchase price of one month as spot price increases in winters and decreases in summer, adding that "so the comparison should be made of the entire year, so that seasonality effect becomes evident".
He said the price of all the LNG cargoes in 2020 under contract was average price of eight dollar and six cents, and spot price of all the cargoes was six dollar and 84 cents.
He said construction of pipeline has been completed two days ago while testing has also been done.
There was no economic sense to construct a terminal for two months, and this is why the government decided to construct terminal through private sector and hopefully it would be done by next month, he said.
Replying to a question, he said the government was providing a Rs4 billion subsidy on gas on account of difference between gas and electricity prices to the export-oriented sector and the remaining of Rs20 billion subsidy allocated for this purpose, Rs16 billion was for power.
He said that planning minister Asad Umar who was heading the committee on oil crisis has now recovered from Covid-19 infection.
Copyright Business Recorder, 2020
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