SNGPL plans Rs361 billion investment in network expansion

KARACHI: State-owned Sui Northern Gas Pipelines Limited (SNGPL) planned to invest Rs361 billion to expand its network as the utility envisages more than a million new connections within the next five years, a document said on Thursday.

SNGPL, in a document submitted to Oil and Gas Regulatory Authority (Ogra), said the company would provide 300 new industrial connections, 3,000 commercial connections and one million domestic new connections.

“SNGPL plans an estimated investment of Rs168.98 billion on the expansion of transmission network while a sum of Rs86.214 billion is proposed to be spent on the expansion of distribution network over the next five years,” the document added.

Pakistan is an energy-starved country which is almost 46 percent dependent on gas while gas reserves are depleting day by day with demand of seven billion cubic feet/day (bcfd) outpacing supply by three bcfd. The gap is projected to reach 6.5 bcfd by 2028-29. The country has established two liquefied natural gas terminals with capacity to produce 1.2 billion cubic feet/day (bcfd) of RLNG in the last couple of years. At present, hydroelectric power has a 34 percent share in the power generation mix, furnace oil contributes 29 percent, locally-produced natural gas 19 percent, RLNG eight percent and renewable and nuclear energy five percent each.

SNGPL is the largest integrated gas company serving more than 5.3 million consumers in north central through an extensive network in Punjab, Khyber Pakhtunkhwa and Azad Jammu and Kashmi

The utility has sought an increase of Rs356.24/million metric British thermal unit (mmbtu) in tariffs for business, and if approved by Ogra the gas rate would go to Rs811/mmbtu. Moreover, an increase of Rs79.51/mmbtu for LNG business and an increase of Rs4,302.24/mmbtu for LPG business has also been sought by the northern gas utility.

Ogra said gas market is not competitive and commercialised. Government has direct role for policy matters, gas concession agreement and allocation, while energy security and supply is also its subject.

Government is considering private participation and third party access regime in the gas sector in addition to import of gas, encouragement of shale, flare gas and rock gas.

“Without private investment and participation, neither the resources can be mobilised nor the sustainable self-relied economic growth can be achieved,” the authority added.