Govt cannot provide expensive LNG beyond a limit: Hammad Azhar

Federal Minister for Energy Hammad Azhar said on Friday that he was hopeful that the gas shortage issue would be resolved, admitting that the government could not provide the fuel source through expensive imports beyond a limit.

Pakistan has been facing severe shortage of gas this winter, forcing residents to buy cylinders to keep at their homes. Sui Southern Gas Company Limited (SSGC) has said that it currently faces shortage of around 250 to 260 mmcfd, with demand in winter rising to 1,250 mmcfd.

Azhar said that the system has faced depletion of output with a 9% reduction each year.

“There is a stay on the provision of gas to priority areas,” said Azhar during a press conference on Friday. "In the next hearing on December 30, we will bring it up.

"For the past several years, the system has faced gas shortage in the winter season, while demand increases 3-5 times.

"On the other hand, Pakistan’s natural gas reserves are depleting 9% a year. Just in the past two years gas reserves have depleted by 18%, while demand for domestic and industrial usage is on the rise."

Azhar added that imported Liquified Natural Gas (LNG), which Pakistan has increasingly relied on in recent years, has become "extremely expensive".

“We are purchasing LNG cargoes at $30-40, which cost billions of rupees to the national exchequer, and then we provide it at cheap rates. Therefore, only limited supply of LNG can be provided to the domestic pipeline.

“I want to ensure that the SSGC and SNGPL teams are working day and night to improve gas management despite rising demand and yearly decline in gas reserves."

Domestic sector in Sindh facing gas shortage, admits SSGC

Earlier, the managing director (MD) of Sui Southern Gas Company Ltd (SSGC) admitted before the National Assembly’s Standing Committee on Energy that the domestic sector in Sindh, particularly in Karachi, was facing gas shortage because supply to general industry and captive power could not be curtailed due to stay order in courts and insufficient LNG supply.

MD SSGCL said that gas of around 130 general industry units, out of 400, was curtailed, which resulted in shortage of gas supply to the domestic sector.

He said that the SSGCL was facing 250 to 260 mmcfd gas deficit as demand peaked to 1,250 mmcfd against supply of 1,015 mmcfd in the current month. The gas shortage in January 2022 would further increase to 280 mmcfd as demand would be around 1,296 mmcfd and supply would be the same, he added.

Meanwhile, MD Sui Northern Gas Pipeline Limited (SNGPL) informed the committee members that to ensure smooth supply of gas to the domestic sector, gas to captive power plants, CNG outlets, cement, and also power sector was curtailed in Punjab.