SSGCL proves to be a model utility in Pakistan
By AMANULLAH BASHAR
Jan-14 - 20, 2002
In an environment in which the public sector public
dealing organizations are associated with inefficiency, lethargy and
rampant corruption, the achievement of transparent growth and the
services rendered to the satisfaction of the customers certainly sound
highly commendable performance by Sui Southern Gas Company in Pakistan.
Under the circumstances, the motto of SSGC to be a
model utility, providing quality service by maintaining a high level of
ethical and professional standards sounds justified.
Mukhtar Ahmed, flanked by his team members, spoke
about the financial health of the company with a sense of achievement
that the company has given 15 per cent cash dividend, which is
unprecedented during the past 8 years.
Speaking at a press briefing he assured to maintain
the level of financial growth in future as well. The Company's profit
before tax was Rs1.98 billion in 2000-01 as compared to Rs1.5 billion in
1999-00. The after tax was higher by 63 per cent to Rs1.3 billion from
Rs792 million 1999-00.
Dilating upon role of natural gas in Pakistan, he
said that this sector has to replace fuel oil consumption at power
plants besides replacement of motor spirit and diesel in the transport
sector in the coming years. He indicated that primary energy supply
would increase at the rate of 4.3 ACGR to 62 MTOE by 2010. Share of gas
in primary energy mix will also increase from existing 41 per cent to 47
per cent by 2010 based on indigenous sources. The share of gas in
primary energy mix can also increase further from 47 to 58 per cent in
2010 import 800-mmcfd gas.
On the import side, he said there are three options
under consideration of the government for import of oil from
Turkmenistan, Iran and Qatar. Possibility to shift the route of
Turkmenistan gas pipeline from Multan to Gwadur in Balochistan is also
looked into. If Gwadur was chosen as the terminal for gas transmission,
it is going to be a future hub of economic activity especially as a base
for re-export and production of by-products such as LNG and other
He regretted that so far privileged urban based
segment of population is the beneficiary of this facility due to lack of
infrastructure i.e. transmission, distribution and of course development
of the proven reserves. Replying to a question regarding investment in
the infrastructure sector, he said that there is an ambitious plan for
inviting the private sector through privatization process of the
government. However, currently private investment in infrastructure
development has not come forward so far.
BTU based billing
The government has sought details from Sui Southern
Gas Company (SSGC) as to what role it can play in the gas infrastructure
and rehabilitation programme in Afghanistan.
Mukhtar Ahmed, managing director of SSGC considers it
as a great opportunity to involve in exporting its technical expertise
with transmission and distribution system. Besides Afghanistan SSGC has
received queries from Tanzania and Oman for providing technical
expertise and master plan for their distribution network.
Pakistan's gas demand projection was estimated to
surge to 3.7 billion cubic feet per day (BCFD) in 2005 from the current
demand of 2.6 BCFD which is likely to rise 4.2 BCFD in 2010 and 4.6 BCFD
On the resource side, gas production from existing
fields of Sui already depleting and this source may go dry in next 10
There is a gap of one billion cubic feet per day
between demand and supply. To overcome this, Pakistan is looking for gas
import from Turkmenistan, Iran and Qatar who have ample proven gas
SSGC has started infrastructure expansion programme
at a cost of Rs4.6 billion through its own resources and commercial
borrowing will provide additional gas supply of 460 MMCFD to the
distribution system. SSGC has a total customer base of 1,598,467, which
include industrial, commercial and domestic consumers.
Explaining the newly introduced billing system based
on heating value instead of volume, he said the shift in the billing
system has been introduced in the light of complaints from the
manufacturing sector. Now the billing will be made on the heating value
instead of volumes. Although he feels that there would be no major
change in billing amount, yet it is feared that in the absence of
automation in domestic and cottage industry, the amount of bills may
increase considerably. This apprehension is based on the basis of
carefree consumption of gas in homes and small industries. The actual
impact of the change in billing policy will however be assessed when the
SSGC sends the consumption bills next month.
Power generating sector is the largest consumer of
natural gas, which consumed almost 35 per cent of the total gas supplied
by the SSGC. Besides 98 captive power plants, the major consumers are
WAPDA and KESC while Hubco is also in line for consumption of gas in
near future. The future strategy of the government seems to convert
entire power generation from oil to gas, which would certainly require
augmentation of supply. The two major gas consumers however keep the gas
Supply Company on its toes as far as the payment for gas consumption was
concern. The two power companies will have to improve their payment
mechanism for future conversion of their fuel requirements. Currently,
payments outstanding against power generating company i.e. WAPDA-KESC
owe Rs2.9 billion and Rs1.3 billion to SSGC.