SSGC: POWERING NATIONAL GROWTH

May 10 - 16, 2004

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 infrastructure as of December 31, 2004 consists of 2,786 kms of high pressure transmission pipeline, 23,805 kms distribution network covering over 737 towns and villages in Sindh and Balochistan and 62,600 horsepower gas compression facilities.

GAS DELIVERIES

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.

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, two refineries, one fertilizer plant and an integrated steel mill. In addition 1,648,874 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.

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 infrastructure will be expanded by implementing a core investment program of Rs. 34 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 650 kilometers to connect all the underdeveloped gas fields to load centers at an estimated capital expenditure of Rs. 15.5 billion.
•Extension of existing gas distribution system by 6400 kilometers in existing and new towns.

TELECOMMUNICATION SYSTEM

With SSGC's network of gas supply operations stretching across Sindh and Balochistan, telecommunication plays a crucial role in the overall monitoring of operations and maintaining high operational efficiency. Keeping this in view, SSGC has developed a highly advanced telecommunications infrastructure to provide both voice and data communication. The system effectively covers the entire pipeline network A brief outline of SSGCís telecommunications capabilities includes:-

•8 Mbit Digital Microwave Network
•Intelligent network management system
•Low capacity digital spur links
•Packet switching network
•Electronic mail and video conferencing facilities
•Cellular VHF system
•Electronic exchanges
•Solar and Battery Power Systems
•Self support/Guyed Towers

EMERGENCY RESPONSE CENTERS (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.

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.

Today, SSGC is set to become the most IT enabled Company in the region.

INFORMATION TECHNOLOGY

Realizing the need for integration of IT into core business processes, the Information Technology Department is rendering strong support to SSGC. The information technology department provides support for the implementation of the overall business strategies. The IT department is engaged in:

IMPLEMENTATION OF ENTERPRISE RESOURCE PLANNING SOFTWARE (ERP):

Enterprises Resource Planning Software (ERP), attempts to integrate all departments and functions across the company on to a single computer system that can serve the particular needs of different departments.

•Integrated information sharing system for providing timely and accurate information for planning and decision making process.
•Evaluate and introduce new and evolving technical solutions in software and hardware.

To facilitate the development and induction of information technology and to become a most IT enabled company, SSGC has signed a comprehensive Enterprise Agreement with Microsoft. This agreement makes SSGC the first ever public sector utility company to enter such an alliance.

A major project undertaken by this department is the Geographic Information System (GIS). It is a computer-based system capable of displaying geographically referenced information and data identification of the location of SSGC pipeline system. The first of its kind in Pakistan, the GIS-based pipeline information system shall expedite response in any emergency situations.

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).

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.

EXCELLENCE IN CUSTOMER SERVICE

Professionals at SSGC strive for providing consistently high level of services to the customers, through innovative and progressive ideas in line with best international practices. For speedy and efficient handling of customers' complaint, queries and suggestions, SSGC has developed Customer Facilitation Centers at all its regional offices. These centers provide a fast and efficient system of customer care service.

•Moto for the year 2004 "Service with a Smile"
•Up-grading existing 7 CFCs in Karachi, Interior Sindh and Balochistan.
•Establishing 12 new CFCs in Karachi, Quetta, Pishin, Sibi, Hyderabad and Sukkur city.
•All CFCs will be modern, well equipped & well located.

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.

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.

The company has adopted policies to motivate employees to perform at their optimum, day in day out. SSGC has adopted an objective based Performance Management System.

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.

GAS TRAINING INSTITUTE (GTI)

EMPOWERING SSGC EMPLOYEES

The high standards of excellence set-up by SSGC demand training to enable SSGC employees to face challenges with a renewed vigour and confidence in their abilities. The Gas Training Institute (GTI) was established in 2001. Be it basic tasks or complex an issue, GTI has taken the lead in providing quality training to SSGC employees.

The GTI has in a short span of time, conducted courses on different topics, and imparted training to more than 1000 executives and staff with remarkable success.

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.

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 half year ended December 31, 2003, sales increased by 24% by volume and 30% by value over the same period of previous year. The company sold 153,317 MMCF Gas for a value of Rs.22,731 million as compared to 123,812 MMCF and Rs. 17,440 million of the previous period operating profit was Rs.907 million as against Rs. 1,104 million during the same period last year.

For the same period, the Company earned pre tax profit of over Rs.937 million as compared to previous year i.e. Rs. 937 million and after tax profit of Rs. 609 million in comparison to Rs. 605 million of 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.

FIVE YEAR EXPANSION PLAN

SSGC has launched a five year expansion and development plan, at a capital cost of Rs. 34 billion. The project will be completed in phases from 2004 to 2008.

GIREP-II

GIREP-II has been planned to keep the momentum going in the SSGC. The project envisages construction of nearly 650 kilometers of new transmission pipelines at an estimated cost of Rs. 15.5 billion. The rest of the funds shall be used for up-grading existing and rehabilitating the distribution network

The concept of GIREP-II is a continuation of the recently implemented GIREP to provide the requisite infrastructural capability and reliability for effective utilization of additional indigenous gas expected to be available from the prospective gas discoveries in the blocs of Zarghun, Khipro, Mirpur Khas, Sinjhoro, Badin and Golarchi, Mubarak and additional gas from Bhit, Zamzama and Badin.