PSM halts production on gas shortages

KARACHI: Troubled Pakistan Steel Mills (PSM) has halted production after the amount of gas supplied by the state-run gas utility hit a critically low level, it said on Friday.
“The production at Pakistan Steel Mills hits zero level, owing to the low gas pressure from SSGC (Sui Southern Gas Company),” the company said in a statement.The PSM said existing pressure of less than 0.9 kg/cm2 and flow of 12,000 m3/hour is not sufficient to produce any product.
Intermittently, starting and stopping of huge blast furnaces is not only leading to their complete stoppage, but have skulled all ladles except two of the total 19 available, which handle hot metal it added.
“This is a very serious situation and minimum pressure of 3 kg/cm2 and flow rate of 28,000 m3/hour is essential for any production.”Pakistan is currently facing huge shortfalls in its energy demands and is desperately exploring all options to meet the needs. The chronic shortfall is forcing the government to divert gas supplies to power generation.
The government has also been in talks with Qatar, Iran and Turkmenistan over the past several years to import gas to tackle serious energy shortages and power cuts, which can last up to 20 hours a day.
Nearly half of the country’s electricity is generated by gas and its output of 4.1 billion cubic feet per day is well short of demand for as much as 6 billion, depending on the time of year.
The PSM had reported zero production on several occasions in the last 12 months, mostly due to the energy shortages. Pakistan Steel frequently suffers severe cash flow problems due to heavy losses, which forced the gas utility to slash its supply.
The average production of mills stands at 22-23 percent in the current fiscal year (2014-15) against just six percent last fiscal. The mills reported cumulative losses and liabilities around Rs260 billion since July 2008. Sources, however, claimed such losses have climbed beyond Rs290 billion.
A spokesman said the mills has written several letters to the Ministry of Petroleum and Natural Resources and SSGCL on low gas pressure, “but no action has been taken from any authority concerned and the situation has gotten from bad to worse.” He added that the PSM is facing low gas pressure since more than two weeks. “It has not only affected production, but it has been also adversely affecting machineries of the plant.”
“If the situation prolongs, it may damage the sensitive and complex plant to the irreparable condition causing huge loss to the national exchequer.” “The reduced gas pressure previously damaged the blast furnaces and steel converters...and might damage them again beyond redemption.”