Friday July 19, 2024

Plan to give RLNG at full price to housing societies not hooked to gas network

By Khalid Mustafa
December 07, 2023

ISLAMABAD: In a major development, the government has decided to issue clear directions to the northern and southern Sui gas companies to start giving RLNG connections to all housing societies that are not connected with the natural gas distribution network at full price.

The RLNG cost of over $12 per MMBtu (Rs3700 per MMBtu) will fully be recovered from the dwellers of the housing dwellers including transportation and distribution allowed losses.

A liquefied natural gas (LNG) container arrives at a storage station in east of Tokyo, Japan in this undated image. — AFP
A liquefied natural gas (LNG) container arrives at a storage station in east of Tokyo, Japan in this undated image. — AFP 

“About 200 housing societies require gas connections, but the government has asked them that local gas production has tumbled to just 3.2bcfd which is further dwindling at a fast pace and only RLNG can be provided to them. The local gas may cater to country needs for six to seven years only,” top officials of the Energy Ministry told The News.

Right now, about 3.3 million applications are pending with the gas companies which also include those applicants who reside in areas that are connected to gas transmission and distribution networks. “We will not provide the RLNG connection to those who are connected with the existing gas distribution network as after getting the RLNG gas connection, consumers can take the gas companies to court on the grounds of discrimination in charges.

If the government provides, the official said, the RLG supply to all 3.3 million applicants, then it will have to import 800 mmcfd of gas for which a new LNG terminal is needed to import the LNG. However, for housing societies with just 50,000 applicants, only 10-20 mmcfd RNLG is enough.

The officials said, “So we have decided to provide the RLNG at full price to the housing societies instead of local gas. There has never been a moratorium on the provision of RLNG to housing societies, but gas companies were under the wrong impression because of the moratorium imposed on local gas connections despite a decision by the federal cabinet in 2017 under which the ban on gas connections based on local gas was imposed, but not on RLNG connection.”

They said, “Now the Petroleum Division authorities have decided to issue clear directions to the gas companies to this effect so that they can start giving the RLNG gas connections to housing societies that are not connected to the existing distribution network.”

“We are in the process of making a summary which after more consultation will be put before the CCoE for the decision of issuance of the direction to gas companies for RLNG connections,” the officials said.

“Another option is to keep in view the federal government’s decision of 2017, based on which the Petroleum Division may be asked to issue the clarification to the gas companies. This way, fresh approval by CCoE won’t be required,” the officials added.