SNGPL to suspend supply to power, industrial sectors for 20 days

ISLAMABAD - Seemingly hatching an ugly conspiracy to push the entire nation into the hell of darkness on a religious event as sacred as Eid, the SNGPL has decided to suspend gas supply for power, fertilizer and industrial sector for twenty days due to annual repair and maintenance of Qadirpur gas field to be started by the end of current month (28th August). It was learnt that schedule of annual repair and maintenance is likely to be initiated after a delay of two months this time because of delayed permission from Petroleum Ministry in this regards. Resultantly CNG and electricity consumers would suffer in Ramazan and especially on Eidul Fitr, sources said, adding, that shortfall of Sui Northern Gas Company Limited (SNGPL) would touch the horrifying limits of some 70bcfd after the suspension of gas supply from Qadirpur gas field. SNGPL was contemplating to extend the standard period of CNG loadshedding only to add salt to the injuries of already perturbed consumers facing high ceiling price of CNG recently jacked up by Rs 7 along with three days gas outages, sources added. Qadirpur gas field, which produces 450 million cubic feet gas per day that accounts for about 10 percent of the countrys natural gas output, is one of the third country largest gas field and covering most areas of the country will remain close for 20 days. The gas field started production in 1995 is located at a distance of 8km from Ghotki in Sindh. It contributes 35 per cent to OGDCs gas production, but more importantly it contributes 26 per cent to companys topline, sources said adding that Pakistans wellhead gas production capacity remains around 4000mmcf, but after pipeline leakages are taken into account, supply comes down to around 3600mmcfd, 33 percent less than the demand excluding the supply of gas from Qadirpur Gas field. According to sources at SNGPL, the reason of the suspension of gas supply is that the annual maintenance work is due, which will start from the 28th August and will continue till the mid of September this year. Due to maintenance country has to face 450 million cubic feet shortage of the gas in these 20 days while total shortfall of SNGPL would touch the alarming figure of 300mcfd and an announcement in this regard is likely very soon. It is to note here that the Independent Power Producers Advisory Council (IPPAC) has demanded of the government to release Rs 150 billion immediately to save the IPPs from total closure within the next few days. Failure to do this would cause immediate shortage of electricity for consumers, which already facing long-hour loadshedding. The IPPAC has also requested the newly formed high-powered energy committee comprising of Finance Minister Dr Abdul Hafeez Sheikh, Minister for Water and Power Syed Naveed Qamar, Minister for Petroleum and Natural Resources Dr Asim Hussain, Deputy Chairman Planning commission Dr Nadeem ul Haque and Governor State Bank of Pakistan to immediately convene a meeting of all IPPs so as to apprise the committee of their desperate situation. Additionally, in the month of July Secretary Petroleum Ejaz Chaudhary while briefing the National Assemblys Standing Committee for Petroleum and Natural Resources informed that country would continue to face gas shortfall (loadsheding) till 2025 due to unjust utilisation of precious gas resources of the country. He informed the committee that because of excessive and unjustified utilisation of natural gas across the country, the gap between demand and supply gradually been increasing and there is no chance to get rid of gas loadsheding from the country till 2025. Parliamentary panel was further informed that due to energy supply and demand projection, it could be increased at shocking level of 141 million tones of oil equivalent (MTOE) till calendar year 2030, adding that there is a need to use coal, hydel and others as alternative resources of energy secretary said. Official sources informed that country's energy supply mix for FY 2009-10 was recorded up to 66.5 million TOE out of which hydro-nuclear electricity stood at 11.8 per cent, coal energy 7.4 per cent, Liquified Petroleum Gas 0.4 per cent natural gas 51 per cent and furnace oil up to 29.4 percent. Similarly, domestic energy resources are expected to reach a peak of 54 million Tones Oil Equivalent (TOE) in 2013, however it would be decline up to 43 million TOE by fiscal year 2025, primarily because of declining in natural gas production. Fossils fuels including gas, oil and coal in energy mix could projected to be at the same level of 88 percent as recorded during fiscal year 2008, similarly the share of domestic resource in fossil fuel supplies is being expected to fall from present 64 to 18 percent in FY 2025 in the Business As Usual (BAU) scenario, sources opined. Economic pundits argued that after the shutdown of the field the gas loadshedding might worsen the energy situation spinning into crisis with the passage of time. All sectors will face more gas loadshedding due to suspension of gas supplies from Qadirpur Gas Field but so far to overcome this shortage no new plan landed. It would also cause billions of rupees in damages because of failure to supply dedicated gas quantities to private consumers. They said gas supply suspension to industrial units could lead to heavy closures, massive job losses and cancellation of export orders worth billions of rupees. They were of the view that demand for energy in Pakistan is many times high than supply and daily electricity outages have forced textile and engineering factories to shut and would cause riots across the country. It is relevant to mention that according to the last year schedule, gas closure for the fertilizer and textile sectors was for 7 days and CNG and other small industries remained closed for the four days. The reason of the close was that the annual maintenance work was due, which was started from the 10th September and will continue to 20th September 2010. Due to the maintenance country had to face 450 million cubic feet shortage of the gas in those 10 days. Qadirpur Gas Field is a joint venture of OGDCL, Kuwait Foreign Petroleum Exploration Company, Pak Kuwait Petroleum Exploration Company and Pakistan Petroleum Limited (PPL). Qadirpur Gas Field is currently under the complete control of the state-run OGDCL that holds 75 percent shares, while PPL has a 7 percent interest. OGDCL earns Rs 49 million every day, of which Qadirpur contributes Rs 36 billion.

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