Russia to install 60 LPG AirMix plants in Pakistan

Petroleum minister hopeful about finalisation of deal

ISLAMABAD: In a new development Russia will install 60 LPG AirMix plants in Pakistan out of which 24 will be set up in Balochistan. The remaining will be set up at Muree, in Gilgit-Baltistan and AJK. 

“We are in talks with Russian firm and are very close to finalisation of the deal for setting up 60 LMP AirMix plants in various parts of the country,’ Federal Minister for Petroleum and Natural Resources confirmed to The News.

This will be the second deal on natural gas with Moscow being finalised as Russia will construct 1,100 kilometer LNG pipeline from North to South too. It is pertinent to mention that the Economic Coordination Committee (ECC) that met here on October 31 accorded approval to the plan for setting up of the LPG Air Mix Plants at Murree (Kurbagla, Dewal, Company Bagh and Tret), Awaran and Bella at an estimated cost of Rs1.353 billion.

The price of gas for the dwellers of the said areas will be equal to the price of highest domestic slab consumers. However, it’s cost will be about one third of LPG cylinder of 11.8 kg, Shahid Khaqan Abbasi Federal Minister for Petroleum and Natural Resources said.

The minister further said that tariff for the consumers of above projects would be at Rs600 per MMBTU which is equal to the highest slab for supply of natural gas to domestic consumers. However the impact on weighted average cost of gas has been calculated in terms of five projects at Rs0.60 per MMBTU as worked out by SNGPL and SSGC. The UFG (unaccounted for gas) if any in case of LPG AirMiX supplies would be ring fenced ad will be borne by consumers of the LPG AirMix Plants.

However, the summary available to The News says that the gas consumers of KP and Punjab will be forced to pay Rs 4-5 billion to ensure LPG supply to inhabitants of Murree at cheaper rates. The minister says there will be negligible impact on the legitimate gas consumers.

But the summary unfolds more disclosures mentioning that the Sui Northern will not be allowed to provide cheaper LPG to dwellers of any other part of the country except Murree showing that the gulf between haves and haves not will get widened more.

Under the LPG Air Mix plants, the dwellers of Murree (Kurbagla, Dewal, Company Bagh ad Tret will be supplied LPG at Rs600 per MMBTU (million British thermal units). And the remaining at Rs4,000 per MMBTU. This will be recovered from the gas consumers of KP and Punjab meaning that they will pay Rs 4-5 billion in one year more to ensure cheaper provision of LPG to Murree consumers, another document pertaining to the summary reveals.

Both the gas utilities Sui Southern and Sui Northern will not be allowed to provide cheaper LPG to consumers of any part of the country, rather they will be bound to pay the full cost of LPG Air Mix.

The gas companies have also been advised by ECC to also install LPG AirMIX plants in Housing societies and their tariff will be at the actual cost of LPG incurred by the gas utilities plus their operational and distribution margins.

Under the ECC decision, for the housing colonies the private sector is free to establish their own LPG Air Mix plants subject to the fulfillment of all codal formalities such as OGRA licencing, explosive licences etc. it was also decided that in addition to the above mentioned plants 30 new Air mix plants each on SSGCL and SNGPL system will be constructed in the areas of AJK, Chitral, Gilgit-Baltistan and backward areas of Balochistan as the development of these areas is the first priority of the government. The setting up of the LPG Air Mix Plants will save these areas from the rapid deforestation in these areas.