Industrial units dismayed over gas outage, seek level-playing field

KARACHI: Industrial units were shocked over the closure of gas supplies by Sui Southern Gas Company (SSGC) to non-exporting sector, saying the shortfall could instead be managed by using regasified liquid natural gas (RLNG)

There are orders that the entire volume of RLNG of 1,200 million cubic feet should be given to Sui Northern Gas Pipelines Limited (SNGPL), Zubair Motiwala, chairman of Businessmen Group said.

“What will happen to these industries in Karachi to whom supply of 200 mmcf RLNG (including KE) was committed,” Motiwala said. “It’s a double jeopardy as in addition to supplying gas from Sindh’s indigenous resources, RLNG is also being handed over to SNGPL. In such problematic circumstances when KPD Gas field and Engro Terminal were simultaneously going on a turnaround, what is going to happen to industries in Karachi.”

SSGC attributed the shutdown to ‘severe’ shortage in gas supply from fields. One of its major fields Kunar Pasaki Deep is on annual turnaround for 21 days.

SSGC asked industrial units from non-export sectors to curtail their gas consumption for 100 percent starting from Tuesday, June 22, till further notice. “This is being done in the greater interest of the general public,” it said in a letter to the industrial associations.

Motiwala said the turnaround could have been scheduled during the forthcoming holidays of Eid Ul Azha.

As KE has the capacity to use furnace oil for power generation, the gas supply being given to ME should be curtailed and transferred to industries and KE may use furnace oil until the crises are over, he said.

“The decision to suspend gas supply would affect the performance of general industries which are an important part of the supply chain of export-oriented industries hence, the general industries in one way or the other participate in the export activities. Consequently, it will also have very devastating trickle down effect on the trading, wholesale and retail networks which will ultimately create negative signals and uncertainty.”

Shariq Vohra, president of Karachi Chamber of Commerce and Industry said the suspension of gas supply to industries of Karachi would cause layoffs, financial losses to industries and revenue losses to national exchequer.

“Ongoing gas crises in Karachi has become a very serious issue that needs to be probed because at a time when the industrial activities were gradually returning to normalcy, some elements in the system abruptly intervened and created gas shortage which is going to result in closure of many factories. Similar kind of situation was created when they disconnected 225 industries in Karachi in the name of replacing it with the power supply,” Vohra said. “If the gas crises go on like this, it would become difficult for industries to ensure smooth supply of goods for the local markets as well as for the export industries and the shortages would trigger inflation.”

They appealed to the government to reverse the decision of 100 percent gas closure to Karachi industries; otherwise almost 50 percent industrial units will close down, resulting in mass unemployment. The focus should be on reducing production cost and promoting industrialisation to produce more avenues for employment, they said.