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KARACHI: Managing Director of Sui Southern Gas Company (SSGC) Imran Maniar has said has that gas crises being faced during the winter season were likely to continue for one to two more years until the new terminals for RLNG get installed at the Port.

There were difficulties and challenges but the picture is rosy as upon completion and activation of Terminal-III at the Port and if the SSGC decides to make a commitment with terminal owner only if consumers of SSGC pledge to buy the additional 500 mmcf, it would certainly help in resolving gas shortage issue being suffered by all types of consumers in Karachi, he said while exchanging views at a meeting during his visit to the Karachi Chamber of Commerce and Industry (KCCI).

Chairman Businessmen Group (BMG) and Former President KCCI Zubair Motiwala, Vice Chairman BMG Jawed Bilwani, President KCCI Shariq Vohra, Senior Vice President Saqib Goodluck, Vice President Shamsul Islam Khan, Former Presidents KCCI Majyd Aziz and Younus Bashir, Former Vice President Muhammad Idrees, Chairman Public Sector Utilities Subcommittee Atif Jamil ur Rehman and Managing Committee Members along with representatives of industrial town associations also attended the meeting.

While highlighting the overall gas demand-supply situation, MD SSGC informed that a total of 4,000mmcf gas including indigenous gas and RLNG was being used all over the country, of which around 950mmcf was being provided to the SSGC from indigenous resources in Sindh and Balochistan while 150mmcf of RLNG was also being given to them and the rest of gas was being used by SNGPL.

He said the SSGC takes 110mmcf from natural resources in Balochistan while the rest of 75 percent gas comes into the system from resources in Sindh but these gas reserves were depleting fast at a rate of 10 percent per annum.

He said that the SSGC takes around 150 to 180mmcf RLNG from two terminals at Port Qasim but the supply shrinks to 70 or 80mmcf from these terminals during the winter and the demand for gas in Balochistan rises to 120mmcf which create an overall gas shortage of around 195mmcf. To deal with gas shortages, the Ministry has designed a mechanism in which all the consumers from domestic to industrial have been ranked from top to bottom, in which the domestic consumers were at the top of the list, followed by export-oriented industry while CNG stations were at the bottom of the list and non-export industry was above CNG stations.

Therefore, SSGC carries out load management during winter season exactly as per list provided by the Ministry, whereas RLNG supplies to KE are completely cut to zero that helps in covering the gas shortage by 75 to 80mmcf whereas suspension of gas to CNG stations further saves 20mmcf that leads to reducing the gas shortfall by 95mmcf, out of a total shortfall of 195mmcf, he added.

He further pointed out that there was a tremendous push to get villages gasified which requires investment of billions of rupees and huge resources including workforce and equipment who have to be sent to remote areas and villages.

He further said that the industry was paying 70 to 80 percent of gas being consumed by the domestic consumers as the gas tariff for domestic users was very low and less than any other consumers all around the world including Qatar and Iran as it was being subsidized by the industry.

Speaking on the occasion, Chairman BMG Zubair Motiwala said that the first and foremost problem being faced by gas consumers was the low gas pressure in the industrial zones of Karachi which has created serious problems and the entire industry was unable to meet its requirements including efficiency benchmarks and delivery time. As the winter season is just ahead, the question is what will happen to gas pressure and what the current condition of gas supply is, he asked.

Zubair Motiwala said that the data of last decade indicates that 1200mmcf of gas was available from indigenous resources ten years ago when the industries were utilizing around 385mmcf gas and then around 7 years ago, a decline to 335mmcf was witnessed in the industrial consumption, which later on picked up but to date, the maximum industrial consumption was not more than 400mmcf.

We are concerned about the future as the demand for gas continues to rise because the industries have imported huge number of machines to enhance their production, thanks to government policies but all these machines are going to require energy including gas and electricity so what is going to happen is a serious question, he said, adding that machineries worth US$1.5 billion dollars have already been arrived, of which machineries valuing around US$400 to US$500 million installed and started production whereas more machines worth US$1.5 billion are in pipeline which would require more gas.

He was of the view that demand from industries during the winter remains intact yet the industries suffer the most which was not a correct approach. The demand for gas rises in Balochistan to 200mmcf from around 40 to 50mmcf and it also increases in Sindh during the winter season. Hence, the gas shortage was not because of rise in demand by the industry but purely due to enhanced consumption by domestic users. "Despite staying stagnant in terms of gas demand, supply to industry is curtailed and we are compelled to suffer. We don't want more gas in the winter, we want the same quantum of gas at adequate pressure", he added.

Zubair Motiwala said that the five zero-rated sectors have agreed on a tariff of 6.5 dollars for RLNG gas which was available to entire Pakistan but the SSGC has been denied this tariff and the export-oriented industries falling under SSGC's franchise have been compelled to use the RLNG at exorbitant rate which was not affordable. "In this situation, when we are deprived of receiving RLNG, we might have to shift to the SNGPL network."

He expressed apprehensions over gas connections being given to new buildings which were going to intensify the hardships for industry, because as per policy, supplying gas to domestic consumers was the top priority which means that the industries were going to suffer further curtailment due to more supply of gas to new domestic consumers. "All the new buildings should be provided gas via alternate means and the storage facility can be established at the basements of new buildings whereas the domestic consumers must be advised to switch over from gas-run geezers to solar-run geezers as successfully done in many countries all around the world", he added.

President KCCI Shariq Vohra, while welcoming the MD SSGC, said that gas has become a serious issue as Pakistan's natural gas reserves were rapidly depleting while the gas distribution system of SSGC was in a pathetic state, causing severe line losses which was due to the fact that SSGC, which was once known as the best utility service provider company, has been through terrible circumstances during the last 10 years. SSGC has to define effective strategies to control waste of natural gas resources and theft in order to save the economy and the industry from severe losses, he added.

Copyright Business Recorder, 2021

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