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ISLAMABAD: Mari Petroleum Company Limited (MPCL) has threatened to suspend gas supply to Thermal Power Station (TPS) Guddu (G-20), Genco-II if proper measures are not taken to stop gas leakage from pipeline, which is a threat both to the local population and company’s assets.

This note was sent by MPCL’s Director Business Development & Commercial, Hassan Mehmood in response to a letter of CEO, CPGCL, Genco-II, Dr. Niaz Memon and in the light of recent incidents of gas leakage.

MPCL’s Director Business Development & Commercial, in his letter, stated that it is grossly misstated that MPCL has discontinued the supply of gas to CPGCL, adding that the fact of the matter is that CPGCL on average has only drawn between 38-49 MMSCFD gas during past three years against the allocated volume of 110 MMSCFD.

For instance during 2019-20, daily average offtake by CPGCL was 45.5 MMSCFD, followed by 48.8 MMCFD and 38 MMSCFD in 2020-21 and 2021-22, respectively; despite the fact that the term sheet, which expired on Feb 8, 2020, for sale of 110 MMSCFD gas has been pending with CPGCL. MPCL, in the larger national interest it has been supplying gas without any interruption.

The draft supplemental to term sheet, which was earlier agreed in-principle by the CEO CPGCL in an email of February 16, 2021, could not be executed despite continuous follow up by MPCL. The said agreed draft supplemental to term sheet was reopened again in July 2022 by the CPGCL to amend certain commercial clauses.

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The duly initialled supplemental term sheet was shared by the CPGCL on June 25, 2022 which was sent back to CPGCL for its signing after initialling by MPCL on July 15, 2022. The signed copy of the supplemental term sheet is still awaited from the CGGCL.

With regard to the suspension of gas supplies to CPGCL owing to repeated incidents of gas leakage in Mari-Guddu gas pipeline, the gas company has shared the following information: (i) MPCL has been highlighting the issue of gas leakages from the pipeline and requesting CPGCL to ensure its integrity as increased number of gas leakage incidents were posing major risks to the local community; (ii) term sheet approved by the OGRA in 2017 was subject to the condition that CPGCL (being transporter and licensee) will take all necessary safety and pipeline integrity measures to transport gas through its transmission network; (iii) OGRA again on Aug 12, 2022, instructed CPGCL “to operate and maintain its facilities in strict accordance with the technical and other standards prescribed by it and in a manner so as not to endanger public health and safety”. OGRA further advised CPGCL “to execute integrity assessment plan of the gas pipeline on urgent basis and submit progress report on fortnightly basis”; and (iv) after the gas leakage incident on Aug 17, 2022, the supplies to CPGCL were suspended to avoid any untoward incident endangering public health and safety and to ensure safety of infrastructure in the surrounding area.

However, keeping in view the dire need of indigenous gas to meet power demand and upon the assurances given by CPGCL regarding integrity of pipeline, supply of 40 MMSCFD gas to CPGCL was resumed on September 3, 2022. Gas supply was planned to be gradually increased depending upon the progress by CPGCL in execution of remedial jobs to reinstate the integrity of said pipeline.

According to the MPCL, soon after resumption of gas supplies, another gas leakage incident took place in pipeline on September 4, 2022 as a result of which gas supply to CPGCL had to be suspended. The incident was rectified and gas supply was resumed on September 6, 2022. Another incident of gas leakage took place on September 13, 2022 and at the request of CPGCL gas supply was suspended. Later on, upon rectification and assurance from CPGCL, the gas supply was resumed on September 14, 2022.

“Gas supply shut-open story does not end here; because another incident took place on September 20, 2022, resulting in gas suspension followed by recommencement late in the evening,” the company added.

As evident from the facts and earlier correspondences, the gas leakage incidents at Mari-Guddu pipeline have increased manifold during the last 12 months. Record shows that at least 11 incidents of gas leakage were reported at various points during the period from March 2021 to Sept 2022.

On occurring of any such event, the gas supplies were temporarily suspended to ensure the safety of local population and to control methane emissions but always resumed after rectification of the fault and assurance from CPGCL of taking measures to assess and rectify the pipeline integrity issues.

The petroleum company has claimed that quite a few incidents took place in populated areas and in close proximity of MPCL assets. The incident occurred on September 04, 2022 was near Well No. 24 and approximately 50 meters away from the houses of the local community.

MPCL has argued that it has always extended its available resources to support CPGCL for resolution of the issue of gas leakage. In this regard, CPGCL recently requested MPCL to review the BOQ for pipeline integrity assessment before finalization, which is in progress. As a goodwill gesture, MPCL agreed to review the scope of repairs and asked CPGCL to share relevant data (pre-requisite of integrity assessment studies) for appropriate analysis. In this regard, a partial report of ECDA survey, missing mandatory contents, was shared with MPCL. It added that in order to properly interpret and analyze the proposed studies and BOQ minimum data such as pipeline design basis, as-built alignment sheets and number of exposed pipeline locations were also requested from CPGCL.

In addition, various anomalies and discrepancies of partial ECDA report were shared by MPCL with CPGC field management.

Being asset owner, CPGC is responsible for maintaining the integrity of the pipeline beyond the delivery point and MPCL assistance to them is purely as a gesture of goodwill without assuming any liability or obligation whatsoever and therefore any delay in the requisite job has nothing to do with the review process by MPCL.

“Despite our full cooperation and support to CPGCI- flimsy remarks given CEO CPGCL letter on legality of company’s actions are highly uncalled for and must be taken back,” said MPCL.

The company has reiterated that its management commitment will extend maximum support to CPGCL to overcome asset integrity challenges, and at the same time is expecting that CPGCL shall comply with the instructions issued by OGRA on August 12, 2022, failing which the company would have no option but to stop gas supplies till the remedial jobs needed to ensure pipeline integrity are performed by CPGCL.

Copyright Business Recorder, 2022

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