Cut in gas supplies to cripple Sindh, Balochistan industries: Industrialists

The industrial sector in Sindh and Balochistan will suffer adversely after reduction in gas supplies by the Sui Southern Gas Company (SSGC) in the coming month, industrialists told WealthPK.

The industrial sector in these two provinces is already disturbed by gas shortages, especially in winter, hampering production and growth. The industrialists now anticipate a bleaker future after the SSGC Managing Director Imran Maniar announced reduction in gas supplies from the current 720MMCFD (million cubic feet per day) to 500MMCFD over the next five years.
He called for an urgent action on tight gas and coal gasification projects to meet the country’s gas requirements.

“Currently, the SSGC system has 720MMCFD gas with an additional 120MMCFD RLNG (Regasified liquefied natural gas). However, due to the lack of new gas reserves and continuous increase in demand, Sindh and Balochistan are facing a consistent decrease in available gas. Therefore, gas supply to the SSGC system will reduce to 500MMCFD over the next five years. To meet the country’s gas requirements, rapid work is needed on tight gas and coal gasification projects,” he said.

Maniar further explained that the reduced gas availability was due to the absence of new gas discoveries and continuous increase in demand. He highlighted the measures taken by the SSGC to reduce the transmission losses and theft by 6 percent from 14 percent in Karachi in the past year. This reduction is expected to save the national exchequer Rs5-6 billion annually.

However, Balochistan continues to suffer higher transmission losses, requiring further efforts to address the issue. Balochistan currently incurs an annual loss of over Rs24 billion due to gas theft. 

Regarding the steel mills obligations, Imran Maniar mentioned discussions with the Sindh government for acquisition of 1200 acres at Port Qasim in exchange for a debt of Rs50 billion.

“The SSGC’s plan to reduce supplies will be detrimental to the industries in the two provinces,” Tufail Ahmed, a prominent business leader of the United Business Group in Sindh, told WealthPK. 

He said gas shortages had already hit the industrial sector hard, resulting in low production as well as negative growth in exports. The recent increase in gas tariffs has further compounded the miseries of the sector, which is struggling hard to compete in the global market where the other countries are selling their products at competitive rates, he added. 

Faraz Rahman, a renowned industrialist and founding chairman of Pakistan Business Group, said the industrial sector was passing through its toughest times, as the financial cost had already peaked because of high interest rates and utility charges. The SSGC’s plan to reduce supplies in the coming years will deal a death blow to the industrial sector, he added.

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