Unprecedented move: SSGC plans to shut down CNG stations from Oct 15 to Feb 15

KARACHI: Gas self-sufficient province Sindh, with 70 percent of the country’s gas production share, will face acute gas shortages this winter.

Sindh’s CNG stations running on local gas will close down for the whole winter season from October 15, as per the SSGC plan. Sources in the SSGC told this scribe that the stations may reopenfrom February 15 or even later, depending upon the availability of gas in the system. The

SSGC will only allow to operate CNG stations running on LNG. SSGC sources confirmed to The News that amid 150-200 mmcfd gas shortages, tougher measures have been planned for the coming winter that include offering LNG and closure of local gas to some sectors. They also hinted gas shortages for industries.

Top officials in the SSGC confided to The News that it was for the first time in a few decades that SSGC was being supplied with less than 1,000 mmcfd of gas as some gas fields are depleting while new ones are not there to compensate the drop in production. They also revealed that gas shortages and supply to the KE has improved in the recent days because 150 mmcfd LNG has been injected into the SSGC system, clearly implying thereby that gas self sufficient Sindh may not be able to run on local gas soon again.

The company officials are also alarmed that there is a permanent gas depletion scenario after years as one depleted gas field production used to be compensated by the newer one. The SSGC used to have more than 1,200mmcfd gas as share in total production but while demand has increased over the years, its share has come down to barely 1,000 mmcfd.

After years of negotiations and luring, the SSGC succeeded in converting the first CNG pump in April this year. Over the course of the past few months, 108 stations have been converted on LNG.

The CNG station owners have complained that the SSGC wants to pressurise them by closing local gas if imported LNG is not accepted. They fear that if LNG prices in international market go up like before 2014, no one would purchase CNG and their investment may turn into a total loss. They have apprehensions that the SSGC isn’t purchasing LNG but it is PSO that purchases LNG while SNGPL is the local purchaser from PSO. The CNG station owners believe that there should be LNG purchase agreement separately for the CNG sector and that a formulae should be decided that ensures LNG based CNG prices stay lower then petrol.

Some station owners believe that Sindh has failed to fight for right share in total gas production in the country. Only Sindh produces around 70 percentage of the total 3.8 bcf gas but share for Sindh and Balohistan both is barely around 1 bcf, which is hardly around 30 percent of the total gas production in the country.