. .

SSGCL proves to be a model utility in Pakistan

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 downstream projects.

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 in 2015.

On the resource side, gas production from existing fields of Sui already depleting and this source may go dry in next 10 years.

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 reserves.

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.