Textile industry: SNGPL drastically reduces gas supply

Textile industry is likely to face a worsening situation in the coming days, as the Sui Northern Gas Pipelines Limited (SNGPL) has reduced gas supply to the industry to four days a week, it is learnt. Government has set textile exports'' target at $16 billion for the current year 2012-13, however due to the ongoing energy crisis it is difficult to realise the target and the exports would be no more than $12.5 billion, informed sources in the Textile industry told Business Recorder.
About 80 percent textile industry is based on Captive Power Plants (CPPs) and due to cut in gas supply, the production capacity would decline by 20-30 percent, the sources maintained, adding that large-scale closures/bankruptcies and massive lays off in the textile industry are feared. They further said that without issuing notices to these industries, gas supply has been cut on the plea of gas shortage.
Sources said that though the cost of power generation from CPPs in textile sector varies from unit to unit and area to area, average power generation cost of CPPs is less than other sources of generation. Power generated from CPPs running on gas cost Rs 6.50 -7 per unit against Rs 25 from furnace oil and Rs 28 per unit from diesel. An industrialist told this correspondent that when energy crisis started, the government asked mill owners to install CPPs using furnace oil to meet their requirements. But with the passage of time the cost of furnace oil increased and government asked the industrialists to shift CPPs to gas. Industrialists made huge investment and transferred their power generation units to gas. Now gas is not available and the industrialists are in a fix to meet their energy requirements, he observed.
To lessen the gravity of power shortage, the government had decided to procure additional electricity from CPPs installed by textile sector to minimise the energy shortfall in the country. CPPs are already providing 200 MW to the Distribution Companies (Discos) and have the capacity to generate an additional 250 to 300 MW. Presently CPPs are providing captive power to Faisalabad Electricity Supply Corporation (FESCO), Lahore Electric Supply Company (LESCO) and Karachi Electric Supply Company Limited (KESCL).
Chairman All Pakistan Textile Mills Association (PTMA) Punjab Shehzad Ali Khan confirmed to Business Recorder that gas supply has been cut to four days from Wednesday without any advance notice. Shehzad further said that growing energy shortage especially in the manufacturing sector is impeding industrial growth and could lead to substantial reduction in production, jobs and exports.
The CPPs were installed by the industrial community to overcome power shortage, but due to gas load shedding CPPs are unable to provide the desired result and textile mills are on the verge of collapse, he added. He further said that the issue would be raised with the relevant authorities.