SSGC ENHANCED GAS AVAILABILITY
The main will be the power sector
By SHABBIR H. KAZMI
Apr 03 - 09, 2000
In the recent years there have been some large-scale natural gas discoveries in Pakistan. As a result, the availability of gas with the two gas distribution companies has increased. The availability of gas with Sui Southern Gas Company (SSGC) has increased from 600 MMCFD to 900 MMCFD. The main beneficiary of this enhanced availability will be the power generation companies. The list of SSGC customers now also includes FFC-Jordan, a fertilizer manufacturing unit.
According to the information available, the total gas available from the new suppliers is estimated at 660 MMCFD out of which SSGC will get 460 MMCFD and SNGPL 200 MMCFD. However, as a result of swaps to SNGPL will get 160 MMCFD currently being available to SSGC from Pirkoh and Sui fields.
The new allocations to SSGC are from Bhit, Miano and Sawan fields. The total availability from these fields is estimated at 660 MMCFD out of which 460 MMCFD will be made available to SSGC. The producers from new gas discoveries are OMV Pakistan, BHP Australia and Lasmo Pakistan. There is potential for increasing gas production from these fields if more wells are drilled by the producers.
The existing gas producers are Pakistan Petroleum, OGDC, Union Texas Pakistan and Lasmo Pakistan. The largest volume of gas is supplied from Sui field of 260 MMCFD followed by 210 MMCFD from Badin-1 and Badin-2. The allocation agreements from Sui expires in 2003, Badin-1 in 2007 and Badin-2 in 2010.
SSGC has an extensive transmission system comprising of Indus Right Bank Pipeline (IRBP), Indus Left Bank Pipeline (ILBP) and Kadanwari pipelines. IRBP has the largest designed capacity of 1,040 MMCFD followed by Kadanwari of 425 MMCFD and ILBP of 220 MMCFD.
During the year 1998-99 SSGC witnessed 5 per cent growth in sales and profitability improved by 42 per cent. This was the cumulative effect of increased sales, reduction in gas purchase price, increase in asset base and decrease in financial charges. A major accomplishment during the year was the resolution of inter-corporate debt problem. While gas purchase volume increased by about 5 per cent, the cost of gas declined by nearly 20 per cent. During the year 579 kilometers of new mains and service pipelines were laid and another 170 kilometers were rehabilitated/replaced.
The after tax profit of SSGC jumped from Rs 652 million in 1998 to Rs 953 million in 1999. This was mainly due to reduction in cost of sales, higher profit from meter manufacturing division, other income and reduction in financial charges. The other expenses registering increase were depreciation and taxation. The depreciation expenses increased from Rs 1.753 billion in 1998 to Rs 1.849 billion in 1999 and taxation jumped from Rs 375 million to Rs 512 million during this period.
The gross sales of the Company increased from Rs 15.623 billion in 1998 to Rs 16.349 billion in 1999, but the net sales decreased from Rs 15.833 billion to Rs 14.055 billion. Despite the reduction in net sales, SSGC was able to post higher gross profit which increased from Rs 5.736 billion to Rs 5.948 billion during this period.
EXISTING GAS SUPPLY TO SSGC
Producer Field Allocation(MMCFD) PPL Sui 260 OGDC Pirkoh 80 UTP Badin-1 150 UTP Badin-2 60 Lasmo Kadanwari 40 OGDC Daru 10 Total 600
CURRENT SALES (MMCFD) (As on June 30, 1999)
Industrial 184 Power 58 Fertilizer 60 Commercial 12 Domestic 86 Sindh
Industrial 24 Power 80 Commercial 6 Domestic 40 Balochistan
Industrial 1 Power 16 Commercial 3 Domestic 30 Total
Industrial 209 Power 154 Fertilizer 60 Commercial 21 Domestic 156 Total 600
NEW ALLOCATIONS (MMCFD)
Bhit 260 260 Nil Zamzama 150 Nil 150 Miano 100 100 Nil Sawan 150 100 50 Total 660 460 200
Swap to SNGPL
Pirkoh 80 Nil 80 Sui ex-ILBP 60 Nil 60 Sui ex-IRLP 20 Nil 20 Total 160 Nil 160