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PROFILE

SARWAT FATIMA

COLUMN FOR THE RECORD
COMPANY PROFILE SSGC: THE FLAME CONTINUES TO BURN
INTERVIEW AN INTERVIEW WITH SAEED KHAN

 

SSGC: THE FLAME CONTINUES TO BURN

 


Dec 08 - 14, 2003 

 

 

The Sui Southern Gas Company came into existence as a result of a series of merger of three individual gas companies, in Sindh and Balochistan. The Sui Gas Transmission Company incorporated in 1954, engaged in operating a natural gas transmission pipeline from Sui to Karachi. The Karachi Gas Company and Indus Gas Company set-up in 1955 to build and operate gas distribution systems in Karachi and interior Sindh.

Today, half a century of professionalism and progress has made the SSGC one of the largest integrated natural gas transmission and distribution companies in Pakistan, serving the entire Southern region of the country, comprising the provinces of Sindh and Balochistan.

Since its inception SSGC has been breaking new grounds by introducing innovative projects and services fulfilling its corporate and social responsibilities, setting up installations/stations at far flung areas and developing its distribution and transmission network.

WELL-KNIT NETWORK

The Company's gas supply infra-structure consists of 2,786 kms of high pressure transmission pipeline, 23,416 kms distribution network covering over 737 towns and villages in Sindh and Balochistan and 62,600 horsepower gas compression facilities.

GAS DELIVERIES

SSGC has achieved a major milestone by surpassing total gas flow in its system of 1.2 billion cubic feet per day.

SSGC has doubled its gas transmission system capacity as from 600 MMCFD in July 2000, to the current level of 1200 MMCFD. This rapid expansion has been achieved through well conceived and intelligently engineered Gas Infrastructure Rehabilitation & Expansion Project (GIREP) at a cost of Rs.3.1 billion. This was made possible through extensive use of system modeling of gas flows through SSGC's advanced TG network pipeline system simulation software.

Full flow and capacity utilization has been achieved with the integration of the Sawan gas field of OMV from Austria, which has now been completed and started flowing.

Recently, in the last six months, the ENI-LASMO's Bhit gas field project was completed, which is supplying 250 MMCFD of gas. Earlier, Zamzama Phase 1 Project was completed by BHP of Britain.

With the recent announcement of the GIREP II Project, a major 5 years' expansion plan is being undertaken, which entails major additions of new transmission pipelines and distribution network. After its completion, SSGC' system capacity will increase by another 500 MMCFD.

ENERGIZING THE INDUSTRY AND MEETING DOMESTIC DEMAND

Since the inception, SSGC has been meeting the country's fuel needs by merging sound business with national obligation. SSGC has undertaken supply of the major portion of the country's fuel gas needs to meet the demand of over 2412 industrial customers, seven power plants an electric utility, two refineries, one fertilizer plant and an integrated steel mill. In addition 16,48,874 domestic and 17,429 commercial customers are now enjoying the benefits of natural gas and SSGC also ensures timely and uninterrupted gas supply to all its customers.

INVESTING IN THE FUTURE

SSGC is poised to meet the challenges of the future. Based on strategic investments, it has been aggressively upgrading its distribution and transmission network in line with international standards at a phenomenal pace.

STRATEGIC BUSINESS PLANS

To meet the strategic business objectives, the following specific plan of action will be put in place:

Transmission and distribution system sustainable gas supply will be increased from 1200 MMCFD to 1800 MMCFD by 2007-2008
The infra-structure will be expanded by implementing a core investment program of Rs.34.533 billion covering major expansion of the transmission and distribution network, to increase customer base by 330,137 over the next five years.
Expansion in the transmission network by 500 kilometers to connect all the underdeveloped gas fields to load centers at an estimated capital expenditure of Rs.17.175 billion.
Extension of existing gas distribution system by 6400 kilometers in existing and new towns.

 

 

Developing Human Assets

Human Resource Development is one of the top priority areas of SSGC. The company undertakes several initiatives to ensure induction and training of professionals with the objective of ensuring high level of professionalism and productivity at all level of its employees. Be it basic tasks or complex issues Gas Training Institute (GTI), established in 2002, and has taken the lead in providing quality training to SSGC employees.

SSGC believes that satisfied employees provide quality service. SSGC provides satisfaction of its employees and giving them adequate incentives to provide high quality work.

The company aims to motivate employees to perform at their optimum, day in day out. SSGC has adopted an objective based on Performance Management System, which enable executives to set their own performance objectives and subsequently monitor their achievement. Due to achievement of objectives, the company's overall performance registers substantial improvement in all its areas of operations.

This is an equitable system which records performance and provides rewards in a fair and transparent manner. The excellence of SSGC is a testimony of its effective HR Management.

CORPORATE GOVERNANCE

Establishing a framework for good governance and ethical business practices, SSGC has focused all efforts to ensure strict compliance with the Code of Corporate Governance contained in listing. Regulations of the Karachi Stock Exchange (KSE) and Lahore Stock Exchange (LSE).

A well-written statement of "Business Policy and Ethical Practices" has been formulated to ensure the highest standard of ethical and fair business principles. The corporate management and all employees are to display exemplary behavior in the light of these guidelines.

The Company has maintained complete transparency and accurate disclosure of all the necessary and appropriate information, which is contained in the Director's Report, in strict compliance with all corporate and financial reporting requirements of the Code.

These activities symbolize the highest standards of good corporate governance and ethical behavior displayed by the company and ensures Sui Southern Gas Company's complete compliance with the Code of Corporate Governance.

CAPITAL STRUCTURE & SHAREHOLDERS

The issued paid up capital of the company is Rs. 6.712 billion representing issue of 671,174,331 ordinary shares of Rs. 10/- each.

SSGC is a public limited company and is listed in Karachi, Lahore and Islamabad Stock Exchanges. SSGC is managed by a Board of Directors comprising 14 Directors, who are elected by shareholders for a three years term. Being the holder of more than 70% shares, the Government of Pakistan nominates/appoints the same proportion of the directors. Remaining 30% shares are held by individual/foreign shareholders, companies and institutions.

OGRA GRANT LICENSE TO SSGC

The Oil & Gas Regulatory Authority (OGRA) issued non-exclusive license with exclusive rights for transmission, distribution and sale of natural gas for next 30 years to Sui Southern Gas Company Limited.

The objective of the OGRA was to foster competition to increase investment in the midstream and downstream oil and gas sectors and to protect the rights of the consumers. Besides, the issuance of license to the two main companies, OGRA also issued performance and service standards for the license holders.

EXCELLENCE IN CUSTOMER SERVICE

Professionals at SSGC strive for providing un-matched and diverse services to the customers through innovative and progressive ideas inline with best international practices. For speedy and efficient handling of customers complaint, queries and suggestions. SSGC has developed Customer Facilitation Centers at all its divisional offices. These centers provide a fast and efficient system of customer care service.

Moto for the year 2003 "Service with a Smile"
Up-grading existing 8CFCs in Karachi, Interior Sindh and Balochistan.
Establishing 15 new CFCs in Karachi, Quetta, Pishin, Sibi, Hyderabad and Sukkur city.
All CFCs will be modern, well equipped & well located.

EDGE IN TECHNOLOGY

Quest for excellence and cutting-edge technology has played a key role in SSGC expansion and strength.

Above all, technology brings greater benefits to customers. For example, all SSGC meter reading is now carried out through hand held computers saving valuable time and minimizing errors. For industrial customers, Meter Tek Data Logger system is installed on meters with computerized electronic volume-correctors. This is a high-tech remote monitoring system for daily gas consumption extensively used in distribution and gas load management.

SSGC's computerized billing system prints bills through the online network in the entire franchise areas. While payments made to the banks are transferred online for processing.

Today, SSGC is set to become the most IT enabled Company in the region. Realizing the need for integration of IT into core business processes, the Information Technology Department is rendering strong support to SSGC. A key initiative of this department is the implementation of the Geographic Information System a computer-based system that effectively provides forecasting data for further strategy development.

 

 

Increasing the efficiency of business processes is another priority area for SSGC. An Enterprise Resource Planning (ERP) software integrates all departments and functions on to a single computer network. Through Business Process Re-engineering (BRP), the company performs critical analysis of existing business processes to achieve breakthrough improvements in performance measures, where as a state-of-the-art Unified Messaging System has also been introduced to achieve greater efficiency.

Maintaining its technological edge, SSGC has signed a comprehensive enterprise agreement with Microsoft the only such agreement by a public sector utility company in Pakistan.

Since the pipeline network forms the backbone of SSGC's operations, special steps have been taken towards ensuring maximum efficiency. Using highly advanced PL Studio simulation software, PL Studio is capable of accurately simulating large, complex pipeline network, on the basis of which the performance, efficiency and financial viability of new projects is evaluated before actual implementation.

TELECOMMUNICATIONS

Telecommunications play a vital role in maintaining high operational efficiency at SSGC. Through the advanced microwave digital network, and with video conferencing facility, all SSGC offices and facilities remain connected 24 hours a day.

PROMOTING SAFETY

SSGC is committed to the health & safety of its employees and preservation of the environment in its areas of operation and will continuously adopt, implement and improve appropriate procedures, processes and safeguards to achieve these objectives. It is believed that; "No business activity is more important then health, safety and environment".

In pursuance of this belief, company is establishing HSE management system to ensure that the standards, processes and procedures needed to achieve safe operations are identified, implemented and maintained. SSGC's Health Safety and Environmental Management System is a common framework connecting business planning, implementation, measurement and performance improvement. This system guides our businesses in systematically managing the HSE aspects of their operations.

Today Human Resources are the most valuable assets of an organization to ensure their well being, an attempt is being made to develop comprehensive safety policies for the Company in order to achieve maximum benefits of accidents prevention by enforcing these policies in their true spirit. These policies will undergo a constant review for necessary modifications/amendments/additions as and when required.

EMERGENCY RESPONSE CENTRES (ERCS)

ERCs are established at six key locations at Karachi and Quetta terminals, Shikarpur, Nawabshah, Dadu and Sibi Head Quarters. These are fully equipped to deal with any emergency situation in case of transmission gas pipeline rapture/fire resulting from sabotage, wars acts and similar activities. The ERCs teams are capable of reaching affected segment within hours along with necessary machinery equipments.

The SSGC has installed remote actuated valves to isolate the selected sections of the transmission pipelines in the event of emergency through remote operation of the valves from its Head Office and other control stations. This is a major improvement which allows the Company to reduce the loss of gas to the atmosphere in the event of pipeline emergencies.

CORPORATE SOCIAL RESPONSIBILITY

The company has always been committed in its obligation towards community development of the areas where it is operating. Its social welfare programme is reflective of its concern for society as a whole.

SSGC has formulated a policy, relating to donations, charities, contributions and other payments of similar nature, named as SSGC Corporate Social Responsibility Initiative.

It aims to fulfill the company's Corporate Social Responsibility by providing financial support to educational, health, environment and social projects/humanitarian causes in the current financial year.

For the betterment of community SSGC is engaged in the following projects:

Cooperation with WWF for preservation of "Mangroves Forests" in the coastal areas of Karachi. SSGC is laying distribution gas pipelines in the village of Kakapir at Sandspit to provide an alternate fuel to reduce the cutting of endangered mangrove trees by the local villagers.
Establishing of community centre at Ghari Khairo. The company will support the backward area of Ghari Khairo, by sponsoring social welfare projects for the local community.
Steps to conserve the ancient and valuable Juniper forest in Ziarat (Balochistan) through supply of alternate fuels.
SSGC intends to extend its social responsibility by providing financial support to save this precious national asset. The company has planned to lay gas pipeline project upto Ziarat within a year to provide natural gas as an alternate fuel to the local population. In the mean time, the company has provided LPG cylinders and stoves to the residents of Ziarat.
The management of SSGC has decided in principle to sponsor the component of "Amphi-theatre of Botanical Garden a joint venture of DHA & Horticultural Society of Pakistan to support environment and other activities of public and national importance
SSGC will provide financial support for the establishment of Petroleum, Oil and Gas Engineering Faculty in NED University.
SSGC will provide support to UET, Lahore to strengthen its existing Petroleum Engineering Department and for expanding the program to include downstream oil and gas disciplines.

EXCELLENCE IN FINANCIAL PERFORMANCE
FINANCIAL STRENGTHS
STABILITY WITH EXCELLENCE AND A SOUND FUTURE

SSGC is a Blue Chip Public Limited Company quoted on the stock exchange having AA credit Rating.

During the financial year ended 30th June 2003 the company sold 254,349 MMCF Gas for a value of Rs.36.163 billion which was higher by 8% and 12% respectively over last year. Operating Profit was Rs.2.289 billion.

For the same year the Company earned pre-tax profit of over Rs.2.049 billion as compared to Rs.2.154 billion of 2001-2002 and after tax profit of Rs.1.448 billion in comparison to Rs.1.435 billion of the previous year.

The net profit is based on 17% annual return on average net fixed assets. The Earning per share was Rs.2.16 per share. Cash dividend distributed for the year 2002-2003 was Rs.1.80 per share (18%) as compared to Rs.1.75 (17.5%) for the previous year.

With five years core investment program in place, SSGC will witness improvements from 2003-2008 in its financial performance.

 

 

The company is continuously engaged in evaluating and planning various activities and projects with the objective of converting the opportunities arising out of the discoveries of new gas resources into real benefits for its stakeholders.

MONTHLY PUBLICATION 'THE FLAME'

SSGC's monthly publication "The Flame" is being published. It gives extensive coverage to the Company's activities ranging from new projects to training programmes and provides information about SSGC in particular, and the national, regional, world energy sector in general.