Thursday December 02, 2021

Gas crisis to worsen in January

December 21, 2020

ISLAMABAD: With surge in gas shortages in the country, Sui Northern Gas Pipelines Limited (SNGPL) has closed down RLNG supply to captive power plants meant for non-zero rated industry (general industry).

 The supply of RLNG to CNG and fertiliser sectors has already been stopped, top officials of the Petroleum Division told The News. “Surge in gas shortfall has recently appeared because of the fact that the LNG cargo from Nigeria, which was due to arrive on December 18, has been delayed by four days and will now be decking at Port Qasim on December 22.”

Top sources say that the LNG vessel got delayed as in the loading port, the cargo was exposed to fire. However, it is up to the government of Pakistan if it penalises the LNG supplier for providing the LNG cargo with delay of four days or not.

To a question, top official sources said the authorities have diverted to domestic sector in Punjab and KP, RLNG of 35 mmcfd and 60 mmcfd by closing down gas supply to general industry and CNG sector respectively. Even then the gas pressure in domestic sector in main cities of Punjab and KP has reduced to an extent that it is not possible to cook food.

In the wake of delay of LNG cargo, the gas crisis has also aggravated in Balochistan and Sindh as Sui Southern Gas Company (SSGC) is not able to retain the RLNG of 200 mmcfd rather the intake of RLNG to SSGC has reduced and because of this very fact, the gas crisis in Karachi and Quetta has worsened. However, people are forced to purchase LPG to cater to their food needs. So much so in the capital of Pakistan, except posh areas, people have started facing gas with low pressure and in some areas they are using wood as fuel.

In January 2021, gas crisis will worsen more and the Sui Northern will be left with no option but to close down RLNG supply to the power sector. In January, the system of Sui Northern will face gas crisis of 500 mmcfd. After placing a cut of RLNG to the power sector, the authorities will be able to divert 250 mmcfd to domestic sector, but it will continue to face gas deficit of 250 mmcfd. The government may also go for RLNG supply cuts to the export industry once a week in January, 2021.

During January 04-20, 2020, gas crisis will heighten to a large extent because of failure in getting hold of three cargoes of LNG as the bids were received in fixed price in dollar terms at $12.95 to $15.95 per mmbtu. And the government decided not to procure the pricey LNG.

Factually, Pakistan LNG Limited (PLL) wanted to have six spot cargoes for the month of January, but when the bids were opened on December 10, 2020, international LNG suppliers for the first time didn’t turn with bids for the LNG vessels required for the time slot of January 08-11, 2021, January 12-14 and January 14-15. And no response from LNG suppliers for the said time slots had put the authorities in the state of shock. However, the government went for an urgent tender which opened on December 14 with pricey bids with 26-30 percent of Brent at $12.95 to $15.28 per mmbtu.

Now the government authorities are trying to shift some LNG cargoes, which are due in the last week of December, to the month of January to stagger the gas crisis in reducing the intensity of the gas crisis. The government is also reported to be in talks with Qatar authorities to bail Pakistan out of the impending gas crisis.

However, sources in the government have said that the situation will be brought under control for which strategy is being made through intensive consultations. The sources said strategy in this regard will be finalised and implemented soon.