ISLAMABAD - A sub-committee of the Economic Coordination Committee (ECC) of the cabinet has given its approval to ensure gas supply to fertilizer plants during ongoing winter season; it has reliably been learnt on Sunday.

Sources informed TheNation that during winter supply of 75mmcfd of gas would be ensured to four fertilizer plants and the Ministry of Petroleum & Natural Resource (MPNR) has told the ECC that there would be no import of fertilizer by next year as 20 lakh ton fertilizers would be produced by country’s fertilizer plants. Owing to no import of fertilizers, around Rs120 billion savings would be achieved.  They said the Ministry of Water & Power has now withdrawn its reservations over gas supply to fertilizer plants. As a result to this gas would be supplied to Engro Fertilizer, Agritec Fertilizer, Pakarab Fertilizer and Dawood Hercules fertilizer plants during winter season.

The Ministry of Water and Power had earlier strongly opposed the plan to allocate gas from some fields and diversion of gas from power plants to the fertilizer industry, terming it a violation of the prime minister’s decision on giving priority to power companies. At that time, the power ministry also suggested the ECC that instead of approving gas allocation plan submitted by the Ministry of Petroleum and Natural Resources, a committee should be constituted to address the concerns.

Officials of the MP&NR have briefed the committee (ECC) on the matter in detail that the government had paid around Rs120 billion subsidy in a bid to ensure subsidised prices of fertilizer available to the country’s farmers during last four years because fertilizer plants could not find gas in winter seasons of the said years and as a result to which the government had to import expansive fertilizers for the country.

In a meeting held on August 16, the ECC approved in principle the proposal of the petroleum ministry to allocate new gas supply from existing or fresh discoveries to the fertilizer industry, especially the four plants which were on the SNGPL system but were lying closed due to suspension of gas supply.

Earlier, the petroleum ministry submitted to the ECC short and long-term plans for gas supply to four fertilizer plants, which were on the network of Sui Northern Gas Pipelines Limited (SNGPL).

Under the short-term plan, the ministry has proposed supply of 137 million cubic feet per day (mmcfd) of gas to the four fertilizer plants. This will also divert gas from the industrial sector, leading to additional gas outages for a day. Under the programme, 60 mmcfd of gas will be diverted from Gas Turbine Power Stations of Wapda to Engro Fertilizer.

Since April this year, these power plants have not been consuming their full allocation of 200 mmcfd from Kandhkot gas field, resulting in a decrease in production from the field. Production from the field can be enhanced to 225 mmcfd to compensate for the proposed withdrawal of 60 mmcfd. The ministry has also recommended supply of 22 mmcfd of gas to Engro Fertilizer from Mari field, which will take the total supply to 82 mmcfd. Agritech Fertilizer may be supplied 25 mmcfd from Makori field (Tal block).

SNGPL may arrange around 45 to 55 mmcfd for the other two fertilizer plants - Pakarab Fertilizer and Dawood Hercules - to enable them to operate on rotation by curtailing gas supply to the industrial sector, which will have to face an additional one-day gas load-shedding.

Under the long-term plan, the ministry has called for providing $400 million from the collection of Gas Infrastructure Development Cess (GIDC) to help fertilizer companies lay a transmission network over 1,000 kilometres for receiving gas directly from the fields.

This will shield the fertilizer plants from the impact of outages as plants will get gas directly from the fields without relying on gas utilities.

The fertilizer companies have also supported the plan of allocating 202 mmcfd of gas from dedicated sources of Oil and Gas Development Company (OGDC), Mari Gas and MOL.

OGDC will dedicate 130 mmcfd from Kunnar Pasakhi Deep (KPD) field, 15 mmcfd from its new field Bahu and 10 mmcfd from another new field Reti Maru. In addition to these, Mari Gas will dedicate 22 mmcfd and MOL 25 mmcfd from Makori East.