SNGPL restores gas supplies to captive power plants

LAHORE: The government on Wednesday restored gas supply of captive power consumers, following a week’s suspension due to diversion of the fuel to thermal power generation units.

Following hectic lobbying by the textile industry, Sui Northern Gas Pipelines Ltd (SNGPL) resumed gas supply to textile captive power consumers from 6pm, Wednesday. Accordingly, gas equal to 50 percent allowable daily consumption quota of average consumption (September to November 2021) of captive power plants has been restored.

On June 2, 2022, natural gas supply was stopped to all captive power plants till further order. The industrial sector that was exempted from gas cuts, suffered a direct hit due to the abrupt curtailing of supplies to captive power plants. Earlier, gas quota of export-oriented industrial sector had been reduced to one-third, which invited severe criticism from the textile sector.

With rising temperatures, electricity demand puts pressure on thermal power plants struggling with low fuel inventories mainly due to liquidity crunch. In such testing times, the government was left with no option, but to manage available fuel for power generation as hydropower also plummeted unexpectedly. Deeply trapped in circular debt amounting to Rs2.5 trillion and counting, power managers took the decision of discontinuing natural gas supply to industry.

According to textile industry, due to squeezing of energy supplies, efforts to achieve an export target of $20 billion for the textiles and apparel industry for FY 2021-22 would be hugely challenging. Textiles was the only sector that continues to grow and brings foreign exchange to the country. The sector was gearing up to close exports at $20 billion in June 2022 compared to $15.4 billion in June 2021, said an office bearer of All Pakistan Textile Mills Association (APTMA).

The sector has charted a remarkable performance in the past year. However, despite this progress, the gas/RLNG supply to the Punjab textile sector was shut down without any advance notice.

The tragedy was that even with a 59 percent increase of textile exports in May 2022 ($1.69 billion) over May 2021 ($1.06 billion), exports were not being given their due importance, the official lamented. Furthermore, most mills at present would not be able to fulfill the energy needs from power or gas/RLNG alone, and required both to function. “It is important to stress upon the fact that captive gas/RLNG usage is not consumptive but economic as it leads to sustained production, with benefits of employment generation and enhanced exports,” he added.