SSGCL and SNGPL networks: ECC approves 30 LPG air-mix plants across country

The Economic Co-ordination Committee (ECC) of the Cabinet has approved 30 air-mix plants each on SSGCL and SNGPL networks across Pakistan in addition to establishment of a similar plant at Murree. Official sources told Business Recorder a summary on the supply of LPG through air-mix projects for Murree was submitted to the ECC on April 8, 2016 for approval of LPG air-mix plants at Kurbagla-Dewal, Tret and Company Bagh.
The ECC of the Cabinet in its meeting held on April 11, 2016 had decided that the Ministry of Petroleum and Natural Resources might proceed in accordance with LPG Policy-2016 approved by the Council of Common Interest (CCI). Accordingly, Sui Northern Gas Pipeline Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) were requested to take up the matter with Ogra in the light of these decisions for approval of the construction of LPG air-mix plants.
Ministry of Petroleum and Natural Resources further revealed that SNGPL had submitted a proposal to Ogra for the installation of LPG air mix plants at Murree and decision of the Authority was awaited. The Ministry further stated that the SSGCL had intimated that Ogra had directed them that the companies had neither furnished approval of ECC for new LPG air-mix projects to be installed in Awaran, Bella, Zhob, and Qilla Saifullah, as required per the prevalent policy guidelines, nor had obtained requisite licences for the said projects.
SSGCL had accordingly, requested for approval of the ECC of the Cabinet for specified projects. It was further stated that CCI had given approval to the LPG Policy, 2016 wherein the guidelines were provided to regulate the LPG sector. As regards tariff, LPG Policy, 2016, section 3.4.4: "tariff for LPG air-mix for supply to domestic and commercial consumers would be as determined by the Federal Government from time to time". It was further apprised that it may not be possible for both companies to undertake LPG air-mix projects unless the approval is granted by the ECC. In order to satisfy the Ogra''s requirement, the Ministry of Petroleum and Natural Resources had submitted the following proposals for the consideration of the ECC of the Cabinet: (i) proposed projects for supply of LPG air-mix for Murree (Kurbagla Dewal, Company Bagh and Tret), Awaran and Bella at an estimated cost of Rs 1353.29 million to be funded by respective Gas Utility Companies may be approved;(ii) tariff rate of above projects would be Rs 600/MMBTU ie equal to highest slab for supply of natural gas to domestic consumers or may be changed by the Federal Government from time to time. However, the impact on weighted average cost of gas (WACOG) in respect of these five projects was calculated at around Rs 0.60/MMBTU as worked out by SNGPL and SSGCL; (iii) UFG (if any) in case of LPG air-mix supplies would be ring fenced and would be borne by the respective consumers of the LPG air-mix plant;(iv) SNGPL/SSGCL may also install LPG air-mix plants in housing colonies. However, the tariff would be at the actual cost of LPG incurred by the Gas Utility Companies plus their operational and distribution margins; (v) for housing colonies, the private sector was free to establish their own LPG air-mix plants, distribution network (by themselves or through gas utility companies) and arrange LPG supplies. However, this would be subject to fulfilment of all codal formalities such as Ogra licensing, explosive licenses etc; (vi) permission may also be granted for operation of LPG air-mix plants and construction of LPG storage by third party contractors, if needed; and (vii) for future a blanket approval for construction of 30 air-mix plants each on SSGCL and SNGPL systems may also be granted. The tariff and UFG will be applicable as-per ii & iii above or may be changed by the government from time to time.
During ensuing discussion, the meeting observed that identification of areas to be covered by the construction of these plants is very important. The Ministry of Petroleum and Natural Resources was directed to provide the list of such areas. After detailed discussion the ECC decided that the proposed projects for supply of LPG air-mix for Murree (Kurbagla-Dewal, Company Bagh and Tret), Awaran and Bella at an estimated cost of Rs 1353.29 million to be funded by respective Gas Utility Companies from their own resources may be approved.
In addition to above for future, a blanket approval for construction of the following 30 air-mix plants each on SSGCL and SNGPL system across the country may also be granted. The tariff and UFG will be applicable as-per ii & iii above or may be changed by the Federal Government from time to time:
List of areas for proposed LPG air-mix plants:
SNGPL System
Punjab: Phagwari, Allot, Sher Bagla, Rawat, Ghora Gali, Charhan, Dhanda, Ariari, Karor, Kotli Sattian, Santh Anwali, Kahuti, Lehtrar, Narrar and Panjar.
Khyber Pakhtunkhwa: Chitral, Ayun and Malklot
Azad Jammu and Kashmir: Muzaffarabad, Rawalakot, Kotli, Palandri, Forward Kahuta, Bagh, Hajira, Abbaspur, Dhirkot and Bhimber. Gilgit-Baltistan: Gilgit and Skardu
SSGCL System
Sindh: Umerkot and Mithi at Thar.
Balochistan: Zhob, Qilla Saifullah, Loralai, Kharan, Musakhail, Qilla Abdullah, Keecha at Turbat, Khuzdar, Uthal, Winder, Muslim Bagh, Killi Khanzai, Chaman, Sherani, Sanjawi, Chagi, Panjgor, Harnai, Washuk, Sohbatpur, Wadh in Khuzdar, Barkhan, Bagh District Kachi/Bolan, Mitri (Bolan Katchi), Injeera (Khuzdar), Gandva (Jhal Magsi), Kohlu and Lehri.