Failure to implement Gas allocation plan in 2005 led to current short-fall

Failure to implement Gas allocation plan in 2005 led to current short-fall

Islamabad (Monday, January 9, 2012): A commendable source familiar with government policies has revealed that Pakistani government had a plan to gas allocation in 2005 but did they were least bothered about its implementation resulting
in the current crisis in the energy sector.

The source said, “The government had created a gas allocation and load management policy in 2005 in anticipation of the shortage, but did not implement it, leading to the current crisis.”

Pakistan is facing real time gas shortages and despite the massive shortage of gas faced by the country, the two state-owned gas companies have continued to build new pipelines, spending Rs123 billion over the last six years to
add approximately 2 million more consumers to the gas grid, suggesting, that they have done nothing to curb the growth of demand, leading to an exacerbation of the problem.

Between July 2005 and June 2011, Sui Northern Gas Pipelines laid approximately 35,000 kilometres of pipelines, at an expense of about Rs80 billion, to provide gas to 1.45 million new consumers. Sui Southern Gas Company, meanwhile,
over the same period spent Rs43 billion in laying 14,000 kilometres of pipelines to connect about 600,000 new consumers of gas.

“It is pathetic that the gas companies are expanding their network without keeping in view the gas reserves depletion,” said one official at the Oil and Gas Regulatory Authority. The official further said that these policies are
a strain on the system and would likely cause natural gas prices to keep rising.

Pakistan’s current reserves are producing about 4,170 mmcfd, but that number is expected to decline to about 2,260 mmcfd by 2021. Meanwhile, demand is currently estimated at 5,395 mmcfd which is about 29% higher than current supplies
and is projected to rise beyond 8,000 mmcfd by 2021.

Yet SSGC and SNGP do not seem to have any intention of slowing down their expansion of the gas network. Both companies are working on about 2,900 new projects that are expected to cost about Rs30 billion and add an additional 709
mmcfd of demand to an already strained system. SSGC has completed about 70% of the work on the projects in its area, while SNGP has completed about 46% of the projects that fall under its jurisdiction.

Short URL: https://www.newspakistan.pk/?p=8634

Posted by Wajahat Javed on Jan 10 2012. Filed under Business, Pakistan. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry