The project aims increasing gas transmission and distribution capacity

Sep 09 - 15, 2002

Sui Southern Gas Company (SSGC) has initiated over four billion rupee Gas Infrastructure Rehabilitation and Expansion Project (GIREP). This is aimed at increasing company's transmission and distribution capacity by middle of year 2003. Out of an estimated cost of Rs 4.380 billion, 70 per cent will be met from loans and the balance from own sources.

The project comprises of six components: (1) integration of the Zamzama gas field with the Company's gas transmission system; (2) capacity augmentation of the ACPL gas transmission and distribution pipelines; (3) capacity augmentation of the FFC-Jordan gas transmission pipeline; (4) integration of the Bhit gas field with the Company's gas transmission system with the construction of a pipeline from Bhit to Bajara on the Indus Right Bank pipeline; (5) relocation of compression facilities from Sui to Hyderabad; and (6) rehabilitation of the Indus Left Bank pipeline.

The two of the SSGC's transmission lines are on both sides of the river Indus. Natural gas being fed to these lines depending on their proximity with gas fields. Lately a number of new gas field have started supplying gas to SSGC. Hasan gas field near Shikarpur, operated by Pakistan Petroleum, started supply of 8 million cubic feet per day (MMCFD) in December 2000. The Zamzama gas field near Dadu, operated by BHP commenced deliveries of about 70 MMCFD in March 2001. Gas Sale Agreements were signed with the joint ventures responsible for the development of the Miano, Bhit and Sawan gas fields.

Lately the Company signed an agreement with a consortium of 48 companies for the issue of second tranche of Rs 1,050 million Term Finance Certificates (TFCs). Earlier it had raised one billion rupee through the first tranche of TFCs. These TFCs have been floated to finance the cost of the GIREP and other ongoing developmental projects.

Under the GIREP, 14 kilometer long line with a diameter of 600mm was laid in North Karachi to meet the additional demand for gas and to improve the existing distribution network. The total cost of this project was Rs 174.23 million which was met through internal resources.

Another project, the Company has completed recently is for supply of natural gas to Nooriabad Industrial Estate. The project consisted of laying 23 kilometers of main supply and 10 kilometers of distribution network at a total expenditure of nearly 256 million. Out of this, Rs 128 million were provided by the SSGC, Rs 120 million by Nooriabad Association of Trade and Industry and Rs 26 million by the GoP. With the completion of this project 41 bid and small industrial units situated in Nooriabad industrial area, 41 commercial and 600 domestic consumers are benefited. This project was formally inaugurated by Mohammadmian Soomro, Governor of Sindh recently.

SSGC has also sold its gas purification plant situated at Sui to Pakistan Petroleum. The plant was sold at the net boon value of Rs 6.15 billion in addition to Rs 65 million as premium. This was ajoint venture with SNGPL with a purification capacity of 850 million cubic feet per day. The objective of this transfer is to bring conformity with the prevalent practice in other gas fields, where the producers do the purification of gas. This is also part of the privatization process to handover the gas distribution to private sector.

The Company's distribution network is spread over area of 28,000 kilometers in more than 638 towns and cities. For the first time in the history of SSGC, it undertook angiography of about 700 kilometers of distribution network and cleaned the pipeline and other relevant systems. During 2000-2001 the company laid a total of 404 kilometers of mains and service pipelines to add another 52,506 new consumers. The new consumers comprise of 51,170 domestic, 1,188 commercial and 148 industrial consumers. The total number of consumers as on June 30, 2001 was 1,569,380.