Gas crisis to be over soon: Ship arrives to start LNG regasification for SSGC network: Gauhar

KARACHI: The gas crisis emerged after the closure of the existing floating storage and regasification unit (FSRU) at Engro LNG Terminal for maintenance purposes will be resolved soon as Special Assistant to the Prime Minister on Power and Petroleum, Tabish Gauhar says that a ship has arrived which will start LNG regasification to inject the same into SSGC network in the next three to four days.

Addressing the industrialists during his visit to Federation House, Tabish Gauhar said that the country was able to import around 600 mmcfd gas per day through the Engro LNG Terminal for the last consecutive six years and the ship was operated up to 94 percent of its total production capacity during the period.

"It's a machine and its maintenance is mandatory," he said.

The country has not been able to develop LNG storage capacity yet. It was a policy failure that the government at the time of issuance of licenses to terminal operators back in 2015 did not bound them to have at least 10 to 20-day gas storage facilities. The agreements were made just on take and pay basis.

He said around Rs 330 billion have been collected so far under the head of GIDC, and the same should be utilized for the gas related infrastructure development projects.

The incumbent government with the private sector involvement is planning to form a company to establish LNG storage facilities on land in the next couple of years. 51 percent funds can be utilized from GIDC whereas 49 percent funds could be arranged from Private sector involvement. The storage facility will help Pakistan import cheaper gas when needed, Tabish said.

Responding to queries from Industrialists, he said that unbundling of K-Electric into separate generation, transmission and distribution companies is a must. The company's exclusivity is going to end in 2023. However, NEPRA has the major role to play in this regard.

He said instead of transferring KE stakes as a single vertically integrated entity to some other large foreign or local firms, its transmission, distribution, and generation should be handed over to different players to end monopoly.

Privatizing an integrated and monopoly provider of essential service, ie, electricity to 20 plus million people was a policy mistake made in 2005, but now we are living in 2021 and we should take decision according to the contemporary requirements.

Tabish informed that by next year, the management control of all distribution companies would also be handed over to private sector. Tabish said that the repair and maintenance works of the gas fields were mandatory and unavoidable; and, the government is fully aware of the enormous challenges being faced by the industry and intends to take every possible measure to ease the crisis as early as possible.

Tabish agreed to the recommendation of President FPCCI that there should be a representative of FPCCI in SSGCL; so that, the concerns and issues of industrialists are better understood at SSGCL.

Mian Nasser Hyatt Maggo, President FPCCI demanded immediate resumption of gas supply to Karachi's industry on behalf of the entire business, industrial, and trade community.

Maggo said that the entire industry is united under the umbrella of FPCCI and the industry has suffered unbearable losses due to the closure of gas supply to all industrial areas of Karachi. He further said that the government must realize that the exports of the country will also be badly hit as a result.

KCCI and all town associations of Karachi were represented by their top leadership in the meeting with Tabish Gauhar at FPCCI Head Office - and, they have put forward a unanimous charter of demands pertaining to gas crisis in the country.

Zubair Motiwala, Chairman, Businessmen Group - expressed his shock that we are paying up to 40% more than international competitors; and, yet we are not getting enough gas supply. He further said that current scenario of gas shortage in Karachi warrants that government should initiate an investigation. Motiwala also requested for a foolproof plan of gas supply for coming winter. He emphasized that the government should look at exports and tax collection numbers of Karachi; and, give due preference to Karachi accordingly. He said that Karachi is only getting 380 mmcfd of gas and it is approximately only 18% of the total gas supply.

Shariq Vohra, President KCCI - said that we are discussing our problems with SAPM because we are having high hopes that he will apprise the Honourable Prime Minister of Pakistan on the situation - and, the businesses can get their voice heard.

Adeel Siddiqui, VP FPCCI - said that there is an unimaginable catastrophic havoc in Karachi and Interior Sindh due to a widespread gas shortage and economic activities have come to a halt.

Rehan Chawla from Towel Association said that export orders are bound to get delayed due to current disruption in gas supply and the government should provide a relief package to the sector. Saleem Uz Zaman, Chairman KATI - said that it would not be an overstatement to say that Karachi's industry is on the verge of collapse and the negligence on the part of the government makes them suffer again and again.

Jawaid Bilwani of PHMA said that top 90% of the exporters are suffering the most in the current crisis and importers would be skeptical whether Pakistani exporters can deliver their orders on time or not. Abdul Hadi Chairman SITE - said that it has been two weeks that industries in SITE are suffering due to a very low or no gas pressure.

Copyright Business Recorder, 2021