Thursday July 07, 2022

Gas deficit to hit country in winter, No gas for industries: CNG sector

November 19, 2021
Gas deficit to hit country in winter, No gas for industries: CNG sector

ISLAMABAD: The country is bracing for the worst-ever gas shortfall to the tune of 717-961mmcfd during the peak winter season.

In December, 2021 there will be a gas deficit of 717mmcfd, which will further increase to 961mmcfd in January 2022. This unprecedented huge deficit has left the Cabinet Committee on Energy (CCOE) perturbed, a senior official who attended the meeting told The News.

The power sector would also face a massive cut in RLNG supply and its reliance on furnace oil for power generation would result in more hike in power tariff. It is expected to use 81,707 MT furnace oil for power generation in November, 168,861 MT in December, 148,392 MT in January and 57,337 MT for February.

The CCOE (Cabinet Committee on Energy) that met here on Thursday decided to convene another meeting to discuss options including purchasing more spot LNG cargoes, particularly for the peak winter months, otherwise all sectors including export, general industry, commercial and domestic sector would face a huge gas crisis. Adviser to PM on Commerce and Textiles Razak Dawood urged the Energy Ministry to ensure uninterrupted gas supply to the export sector for achieving export target of $38 billion. The Petroleum Division laid down its weekly rotation plan for off days in terms of gas supply and to this effect rotation-wise closure of cement, CNG and general industry will be ensured. The curtailed gas from CNG, cement and general industry will be diverted to the domestic sector for convenience of citizens.

On the other hand, the domestic consumers are being encouraged to fully utilize the incentivized tariff rates of electricity offered by government @ 12.96 per KWh for indoor and water heating. The chairman CCOE, Asad Umar, resented the Petroleum Division for not coming up with specified allocations of gas to various sectors to help decide gas loadshedding schedule for the domestic sector.

The presentation to the CCOE showed a huge gas deficit in November, December and January and painted a bleak picture of gas availability outlook. It portrayed gas shortfall in November to the tune of 444mmcfd, as 3.799 bcfd gas will be available against the demand of 4.243 bcfd. In December, the gas shortfall will increase to 7,171mmcfd as the gas supply will dwindle to 3.757 bcfd against the demand of 4.474 bcfd. According to the presentation in January 2022, the gas deficit would further escalate up to 961mmcfd as gas supply would stand at 3.821 mmcfd against increasing demand to 4.683mmcfd. In February, the gas shortfall would slightly tumble but would remain at higher trajectory of 613 mmcfd.

One of the top officials proposed at the meeting to curtail the huge deficit during peak season by arranging spot LNG cargoes otherwise the government will certainly face a severe political backlash from the masses. The Petroleum Division, however, suggested to the CCOE that the enhanced demand of domestic consumers would be met through savings from captive power generation. A prudent pressure management plan will also be developed to ensure stable supply of gas to consumers, the CCOE was told. The gas supply to CNG will be curtailed during the winters. But the industrial activity will remain in focus in the gas management plans, especially the export industry. The CCOE approved the demand side proposals submitted by the Petroleum Division and sought supply side proposals in the next meeting.

The CCoE also considered the summary presented by the Maritime Affairs Division on the construction of oil storage at Oil Installation Area Keamari, Karachi. The meeting was informed that insufficient storage infrastructure at the ports creates a bottleneck in the supply chain and results in increased costs. To comprehensively review the situation and available options, the CCoE formed a sub-committee under SAPM on CPEC Khalid Mansoor with Member Energy Planning Commission, Secretary Petroleum, and Secretary Power as its members. The sub-committee will submit its proposals to the CCOE within two weeks.