ISLAMABAD: The Sui Northern Gas Pipelines Limited (SNGPL) has sent an SOS call to the Petroleum Division for clearance of its outstanding dues against the power sector and the Sui Southern Gas Company Limited (SSGCL) which it says is a must to ensure the supply of LNG, well-informed sources in Directorate General of Gas (Petroleum Division) told Business Recorder.
The SNGPL, sources said, in a self-explanatory letter of March 27, 2024, has informed that due to pending recovery from the power sector, it is facing shortages in making payment to the Pakistan State Oil (PSO).
The letter has described the severe financial challenges being faced by SNGPL is managing payment obligations towards RLNG and the indigenous gas supply chain.
Recovery of Rs170.237bn from power sector: SNGPL seeks Petroleum Division’s support
According to the gas utility company, against the RLNG supply cost of Rs106 billion for the month of March 2024, it has paid Rs57.3 billion to PSO till March 27, 2027, still leaving a balance of Rs48.7 billion.
The shortfall is mainly due to pending recovery from the power sector which lags by Rs33 billion as against the commitment of Rs51 billion and Rs7 billion from SSGCL against the RLNG withheld invoice of the first fortnight of the current month, which was due for payment by March 25, 2024. The balance of Rs9-10 billion will be arranged by SNGPL out of its normal collection and additional borrowing.
The SNGPL is of the view that it is considered that all stakeholders must play their role in discharging their obligations to ensure the continuity of the RLNG supply chain avoiding default of PSO and as part of this arrangement, permanent long-term solutions are required to address the situation. In this regard, timely discharge of commitment by power and SSGC are crucial for SNGPL to make timely payment of the balance amount to PSO.
Raheel Farooq, general manager accounts SNGPL in his letter has requested the Ministry of Energy (Petroleum Division) to intervene and help in expediting the realisation of committee amounts from the power sector and the SSGC avoiding any disruptions in the RLNG supply chain.
The PSO is of the view that the LNG (liquefied natural gas) business is bleeding its financial resources as without this business, the company’s equity up to last year would have been higher by approximately Rs45 billion.
“Had the LNG business not been with PSO, the company’s equity up to last year would have been higher by approximately Rs45 billion,” the sources said, managing director/CEO PSO as saying at a recent meeting of the PSO’s Board of Management.
Copyright Business Recorder, 2024
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