IP project gas price to be $11 per mmbtu: National Assembly panel told...

The government is committed to completing Iran-Pakistan Gas Pipeline project and work on the project is under way. This was stated by Mohammed Ijaz Chaudhry, Secretary Ministry of Petroleum on Tuesday while briefing the National Assembly Standing Committee on Petroleum and Natural Resources. The meeting was chaired by Sardar Talib Hussain Nakai, chairman of the committee.
Ijaz informed the meeting that gas price under IP project would be $11 per Million British Thermal Unit (mmbtu) while for Turkmenistan-Afghanistan-Pakistan-India it would $13 per mmbtu. The Liquefied Natural Gas (LNG) will be $17-18 per mmbtu, he added. To attract the foreign as well as local investment in the oil and gas sector, the government has approved increase in existing wellhead gas price from $4 per mmbtu to $6 per mmbtu.
He said route survey of IP pipeline has been completed and the process of land acquisition is going apace. The tender of the project would be floated soon after completion of all the legal formalities. As a long-term step to overcome gas shortage, talks are under way to conclude an agreement for buying gas from Turkmenistan under TAPI and supply of gas would start by 2016, the secretary added.
Ijaz informed the committee that Pakistan at present was facing worst-ever gas crisis, which is a result of the Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company (SSGC) network expansion on the recommendation of the Prime Minister Secretariat to oblige parliamentarians.
He said share of gas in energy mix in Pakistan was 51 percent ie largest in the world. He said CNG fuel was introduced in the country in 1998 and it became most favourite fuel for the motorist by 2005-end. Keeping in view the limited gas reserves, the ministry in 2005 proposed complete ban on the construction of new CNG stations but the government did not take it seriously.
On a question, the secretary informed the committee that Oil and Gas Regulatory Authority was responsible for issuing licences for the CNG stations and Ogra director was responsible for issuing licences for new CNG stations from 2008 onwards, despite ban. The MPs time and again raised the issue of not starting new gas development schemes in their constituencies, on this the secretary said "no more allocation of gas to any sector until new gas reservoirs are discovered."
While discussing gas load shedding particularly in Punjab and Federal Area, the committee was informed that current gas production in the country is a little over 4 Billion Cubic Feet per Day (bcfd), whereas the demand is 6 bcfd. Gas demand during winters increases due to manifold increase in consumption by the domestic sector. The contributory factors for widening gap between demand and supply are continuous increase in gas demand, depletion of existing gas reserves and insufficient/disproportionate addition of gas from existing and new sources; hence the shortfall for the current year is ranging from 668 to 1,061 mmcfd. The present gap is going to increase to around 3,038 mmcfd by 2015. The committee expressed its grave concern over the increasing energy crisis and directed the ministry to come up with solid proposals to avert energy crisis; not only on short-term but also on long-term basis. The committee also directed Gas Utilities (SNGPL & SSGCL) to complete the gas developmental projects of parliamentarians within stipulated time.
He said the government is planning to bring Compressed Natural Gas (CNG) prices at par with the petrol prices and in this connection the ministry is taking necessary steps, adding that bringing CNG prices at par with petrol prices needs legislation.
The meeting was informed by Arif Hameed, Managing Director SNGPL that on annual basis the company was laying 5,000 kilometres gas pipeline connecting new villages and towns with supply network. He said providing new gas connections on the recommendations of Prime Minister Secretariat was making it difficult for the company to carry on its work on the ongoing schemes. He added that SNGPL has to lay some 18,000 kms pipeline in the constituencies of the parliamentarians, which increased prices.
The meeting was attended by Khurram Jehangir Wattoo, Nawab Muhammad Yusuf Talpur, Ch. Asghar Ali Jatt, Sh Aftab Ahmad, Ch Muhammad Barjees Tahir, Muhammad Hanif Abbasi, Rana Afzaal Hussain, Mir Ahmdan Khan Bugti, Begum Shehnaz Sheikh, Dr Donya Aziz, Syed Haider Ali Shah, MNAs, and senior officers of the Ministry of Petroleum and Natural Resources, SNGPL and SSGCL.