SSGC to announce financial results after three-year recess

KARACHI: After a gap of three years, Sui Southern Gas Company (SSGC) will be announcing its financial results in mid-January as the Oil and Gas Regulatory Authority (Ogra) has determined the company’s revenue requirements vis-à-vis the gas prices.

“Ogra has determined the gas prices on the basis of which we are preparing the financial statements,” managing director SSGC Khalid Rehman told newsmen on Friday.

“We will announce financials for 2012-13 and 2013-14 in mid-January, while corporate results for 2014-15 would be made public in early February.”

Rehman said the Ogra’s determination came with a capping on unaccounted for gas (UFG), which was quite below than the actual loss, but “would definitely impact the balance sheet as the company would have to bear these excess losses.”

Ogra fixed the UFG at 4-5 percent, but, SSGC secured stay from the court on this capping. The financials are being prepared at the rate of 7.0 percent UFG allowed to the utility company prior to this latest determination.

Talking about the re-gasified liquid natural gas (RLNG), MD SSGC said the prices determined earlier were provisional and the authority did not consider several aspects, such as administrative costs, UFG and tolling charges.

“So far we have been incurring losses in this entire RLNG scene,” Rehman said. “We are paying more to the supplier than we are receiving from the buyer hence there is no sense in it.” He said the issue would be resolved soon and the RLNG pricing formula would be determined shortly. 

He, however, added that this would not impact the company’s balance sheet, “as the quantum of this business is quite little so far.”

MD SSGC said the biggest challenge facing the gas utility is UFG, “which is embarrassingly high.” 

“We are taking several measures to limit the losses and this may include gas load shedding in high loss areas,” he said.

SSGC operates a distribution network of 46,000-kilometre and transmission network of 4,000km.

“Our transmission system is in a very good shape and there are no losses in it. Only the distribution system needs rigorous reforms,” Rehman said.

The company’s distribution network is quite old and has deteriorated because of lack of investments. There has been an unplanned growth in the system over the years.