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September 24, 2020

SSGC cautions gas shortage to double as supply from five fields halts

Business

September 24, 2020

KARACHI: State-owned Sui Southern Gas Company (SSGC) has warned the government of an imminent gas shortfall to double in the coming winters as supply from five fields comes to a halt, its spokesperson said on Wednesday.

SSGC spokesperson told The News that supply from five gas fields, including Zargoun, Sinjhoro, Kunar Pasaki, Sujawal and Nurbagla stopped to cause 150 million metric cubic feet per day (mmcfd) gas shortage at present, “which would increase to over 350 mmcfd in winters”.

“Zagoun in Quetta and Sinjhoro gas field in Sindh have gone for the annual turnaround,” said spokesperson.

“Supply from Kunar Pasaki is near zero due to technical issues while Sujawal and Nurbagla in Sindh have depleted.”

The company apprised the government of imminent gas shortage requesting it to make arrangements for the additional supplies in the upcoming winter.

“We have informed the government of the shortage,” said the spokesperson. “It is now up to them to arrange additional supplies through imports or whatever source deemed fit.”

The official said the Prime Minister Imran Khan convened a meeting on Thursday (today).

SSGC is getting around 970 mmcfd at present against the demand of around 1.2 billion cubic feet per day.

The gap would exceed 350 mmcfd in winters as the demand is expected to cross 1.4 billion cubic feet per day.

The prime minister has already announced that the country is going to face a major gas crisis this winter, while the crisis would be much worse next year.

“The country is facing energy challenges because other governments never welcomed debate and discussion on it,” Khan said, addressing a seminar earlier this month.

“If we would have held debates in the past, our power crisis wouldn't have been so severe.”

K-Electric (KE) has also blamed low gas pressure from the SSGC for disruption in electricity supply to its consumers in Karachi as the power outages have increased to 12 hours/day in certain areas.

Exporters fear decline in exports due to unavailability of gas to run their captive power plants.

Total gas demand is around 7.5 billion cubic feet/day, while the indigenous production is falling short by 3.5 billion cubic feet/day.

Pakistan has already increased spot buying of liquefied natural gas (LNG) importing at least three cargoes a month. The gap between demand and supply is expected to increase to 2.7 billion cubic feet in FY2023 and 4.8 billion cubic feet by FY2028 without the imported gas, according to the Oil and Gas Regulatory Authority.

The possible gap can be bridged through enhancement in indigenous gas exploration and production through incentivising the energy sector, import of interstate natural gas through development of cross-country gas pipelines and increased import of LNG.

There are currently two LNG terminals: Elengy Terminal and Gasport Pakistan Ltd having a re-gasification capacity of 600 mmcfd each.

The country is turning into one of the fastest growing LNG markets in the world.

It first started importing LNG in 2015, with imports rising to 8.4 million tons in 2019 from 6.8 million tons in 2018.

There is an urgent need to speed up import capacity expansions, which have been planned to absorb incremental inflows.

Information provider S&P Global Platts forecasts LNG imports to rise to 9.3 million tons in 2021, “if Pakistan can bring in another FSRU (floating storage regasification unit) relatively quickly. Imports are expected to exceed 17 million tons by 2025,” it said in a report.