SSGC plans Rs118bln in spending to improve, expand network

KARACHI: The state-owned Sui Southern Gas Company (SSGC) has planned to spend Rs118.5 billion in improving and upgrading its transmission and distribution network, a document said on Wednesday.

The gas utility, in its plan submitted to the Oil and Gas Regulatory Authority, said the company will spend Rs118.5 billion on several of its ongoing and new projects, including re-gasified liquefied natural gas (RLNG) transmission projects over the next five years till 2020/21.

The capital expenditures will increase the company’s fixed assets to a significant extent. The SSGC unveiled its plan to spend Rs74.3 billion to facilitate expansion in transmission system by 623-kilometre and distribution network by 1,187-km during the fiscal year of 2016/17.

The company also envisaged rehabilitation of 1,213-km of lines to mitigate the unaccounted for gas (UFG). Acquisition of other assets with the objective to meet growing demand of natural gas and improve the quality of service in the franchise area was also planned.

The document said gas will be provided to around 104,367 new connections. Total number of customers is expected to reach around 2.9 million. The gas utility also planned to invest Rs19.89 billion on transmission network and will lay high pressure transmission lines connecting the distant stations.

The company earmarked Rs54.348 billion for RLNG transmission projects, which include a high pressure line from Pakland (port Qasim) to Nawabshah via Hyderabad. A sum of Rs20.7 billion is to be invested in the distribution network to expand the outreach to a score of new towns and villages.

However, the company has not earmarked any outlay under its ‘UFG Reduction Plan’ under the five-year capital expenditure scheme. The company is no longer working on the natural gas efficiency project, supported by the World Bank because of various reasons. However, some activities will be continued to control UFG.

The five-year development plan showed that the company would install bulk meters, create isolated segments and manage the small business units more effectively. “The segmentations guidelines have been developed and a comprehensive plan is being reviewed by distribution departments,” it said.

SSGC expects an inflow of 7.5 million metric cubic feet/day (mmcfd) from Jhal Magsi by January 2017. The company continues to operate as a going concern, buying natural gas in bulk from exploration and production companies, transmitting it to consumption centres through its high pressure transmission system and supplying the fuel to end-users through its distribution network.

The gas utility has also worked out a plan to make 1,330 mmcfd available for the current fiscal year, considering the trend of gas off-takes from the existing and new gas fields.