SNGPL starts supplying blended gas to all industrial consumers

LAHORE: The Sui Northern Gas Pipelines Ltd (SNGPL) has started supplying a blend of domestic and imported gas to the entire industrial sector, the company said in a notification.

The gas utility said it had received approval from the Directorate General of Gas to provide a 25:75 mix of indigenous gas and Regasified Liquefied Natural Gas (RLNG) to all existing and new industrial consumers from March 1.

"Therefore, a blend of system gas and RLNG shall now also be provided to all existing and new non-export consumers," the company said. "Moreover, new connections including Load Enhancements henceforth to existing/new/upcoming non-export units will also be provided with blended gas on an ongoing basis." The supply of blended gas to the industry sector is being launched following a reported revision of gas allocation policy by the federal government after assigning one of the top priorities to the industrial sector, both export-oriented and general industry.

As per the revised gas allocation merit order, top priority has been accorded to domestic, commercial (including roti tandoor), and industrial sectors for processing purposes. The decision was approved by the Special Investment Facilitation Council (SIFC), and is aimed at stimulating economic activity and ensuring sustained momentum throughout the year.

The revised gas allocation merit order has been endorsed by the apex committee of the SIFC, during its 9th meeting held in February. Under the new merit order, industrial sectors, including both export and non-export industries, will now enjoy equal priority in gas allocation, with equal gas tariffs.

It may be noted that natural gas’ indigenous supplies contribute about 29.3 percent (FY2021) of the country’s total primary energy supply mix. Pakistan has an extensive gas network of over 13,775 Km transmission, 157,395 Km mains, and 41,352 Km services gas pipelines to cater to the requirement of more than 10.7 million consumers across the country. The government has been pursuing its policies for enhancing indigenous gas production and imported gas to meet the increasing energy demand in the country.

RLNG is being imported to mitigate the gas demand-supply shortfall. Currently, the capacity of two RLNG import terminals is 1,200 MMCFD. Further, OGRA granted construction licenses to Tabeer Energy Private Limited and Energas Terminal Private Limited (ETPL) in April 2021 to develop LNG terminals at Port Qasim Karachi. The extension in the validity of these licenses has been granted by OGRA for further two years (till April 2025) upon the licensees’ request and completion of the requisite formalities.

According to a report, natural gas contributes 38 percent of the country’s total primary energy supply mix. Total domestic gas production has hovered around 4 billion cubic feet per day (bcfd) while domestic demand is estimated at 6-8 bcfd. Thus, there is a natural gas supply-demand gap. Pakistan’s natural gas production reached a peak in 2012, and since then, Pakistan’s production from existing fields has started to decline and recent small natural gas discoveries are barely able to offset production declines.