Despite acute shortage of natural gas, the Sui Southern Gas Company (SSGC) remains committed towards providing maximum supply of gas to Karachi Electric Supply Company (KESC). This was stated by Dr Faizullah Abbasi, MD, SSGC, while briefing media in his office here on Monday in the wake of the company's decision to curtail, as a last resort, regular supply of gas from 60mmcfd to 30mmcfd to its largest bulk customer, KESC.
He said that SSGC is facing acute shortage of natural gas, mainly due to decreased supplies from producers and increased demand arising out of additional winter loads. The demand-supply gap has increased to over 300mmcfd, he added.
Abbasi said that as per Natural Gas Allocation and Management Policy, 2005 SSGC gives top priority to domestic and commercial customers while at the same time it provides gas to CNG stations and industrial sector in accordance with court orders. In this situation, SSGC is left with little option but to request the power sector to reduce its load, he added.
He said that SSGC tries its best to ensure that KESC gets maximum supply of gas since the latter supplies electricity to Karachi, the largest consumer base in the country. The SSGC and KESC have the same clientele and both utilities obviously do no want to cause its customers any inconvenience, he said, adding that in December 2010, SSGC had supplied KESC with 90mmcfd gas. However, despite very short intake of supplies from gas fields, SSGC continued to provide KESC with 65mmcfd till the situation exacerbated over this weekend causing it to reduce supplies to 30mmcfd.
He said that during last 2-3 days, there was a considerable drop in gas pressure which was because of sudden reduction of 140mmcfd gas to its system from the gas fields. He said that the company is channelising all it energies towards stabilising the line pack and bringing it to 940mmcf which will enable SSGC to provide KESC with 60mmcfd gas. He reiterated that the SSGC management is nonetheless determined to further stabilise the line pack to meet KESC's demand of 110mmcfd.
Dr Abbasi stressed that SSGC and KESC have a very close working relationship. "I have assured KESC's CEO Tabish Gauhar that it has never been in gas utility's interest to curtail supplies to KESC", he said. He added that he had informed KESC CEO that SSGC wanted to first stabilise the system and then provide it with required quantity of gas to run its power generating units.
He said that to solve the prevailing crisis, it is important that representatives of KESC, SSGC, trade bodies and CNG associations meet at least once in a month to assess the situation and collectively devise workable solutions.
He stressed that SSGC wants to sign a Gas Sale Agreement (GSA) with KESC but pointed out that the latter wants to do so on its own terms. He said that KESC's claim of providing 276mmcfd gas to SSGC is merely an allocation and not part of any GSA since the two companies have signed GSA for supply of only 9mmcfd gas. The end user of gas has to provide a bank guarantee also referred to as Gas Security Deposit (GSD). This GSD is cash equivalent amount of 3 months of gas sales that translates in quantitative terms to approximate Rs 10 billion which the KESC is not willing to commit.
The SSGC MD said that to further shore up gas supplies, by August 2011, the company would be able to link up its point of delivery to Sinjhoro gas field for receiving 35 mmcfd to 40mmcfd gas. He informed the media that SSGC management has reconstituted the Gas Load Management Committee to monitor and take decisions on the issues related to Gas Load Management on daily basis.
The committee comprises of Azim Iqbal Siddiqui, DMD (South) as its Chairman and Syed Hassan Nawab, DMD (North), Mohammad Hashim, Senior Project Director (Co-ordination and Special Projects) and Yusuf Jamil Ansari, Senior General Manager (Management Services) as its members. The MD was accompanied by members of the gas load management committee and other senior managers including Salim A. Mughal, SGM (D) and Shaukat Baloch, SGM (Transmission) and Nasreen Hussain, Dy. General Manager (Corporate Communications).