The LNG import project initiated by SSGC was in the limelight at the World LNG Summit held in Rome, Italy

Dec 12 - 18, 2005

The Compressed Natural Gas (CNG), a value addition of the available natural gas in Pakistan, has become the most sought after commodity especially amongst the vehicular population, which is finding it hard to survive on the costly fuel oil, which is slipping out of the purchasing power of the people.

Costing almost half of the current motor gasoline price there is a mad rush for switching over from oil to CNG resulting in robust growth in demand, particularly in the urban areas.

The sudden growth in demand has forced all the major oil marketing companies to add CNG counters at the existing retail counters in all major cities on one hand while the demand for CNG kits mostly imported from Italy has also helped the distributors to increase the price of the kits at their will.

It may be recalled that the price of a CNG kit was estimated at around Rs14,000 only two to three years back but it is now being sold at a price of well over Rs40, 000.

The unusual demand growth has also resulted in a marked imbalance of our energy mix as the natural gas is now estimated to have occupied over 50 percent share and is feared to grow further. This phenomenal growth in CNG consumption in power generation, and transport sectors besides industries like fertilizer and other chemical industries may ultimately result in depleting effects on the available natural resources in Pakistan.

In order to cope with the situation, the government was trying to find out ways and means to ensure sustainable supply of gas in future as well. In this respect, besides importing natural gas through pipeline projects from neighboring Iran and Turkmenistan, efforts are also under way for importing Liquefied Natural Gas (LNG), which is also in the final stage.

In this backdrop, the LNG import project initiated by SSGC was in the limelight at the CWC 6th World LNG Summit held in Rome, Italy from November 30 - December 1, 2005.

Actually, the summit is an annual event which brought together nearly 400 delegates representing about 200 companies from all corners of the world.

Some of the world's most reputable companies engaged in the exploration, refining, production, offshore and on-land terminals, shipping and transportation, fabrication of liquefaction and de-gasification facilities, LNG carrying vessels as well as financial or technical consultancy participated in the two-day summit. Many of the delegates visited the Pakistan stall in the exhibition area and asked questions about SSGC's integrated LNG import project and the oil and gas industry.

The Pakistan stall at the exhibition also distributed information about the country, the oil and gas sector, OGDC, PSO, PPL, SSGC and SNGPL in the shape of country booklet, statistics, annual reports, brochures, CDs and leaflets.

The speakers' panel and session chairs comprised over 30 of the most respected names in the world, in the Oil and Gas business including former ministers as well as heads of companies and conglomerates, who had traveled from six continents to Rome, Italy, for the Summit. Dr. Alirio Parra, former Minister of Mines and Energy in Venezuela and Senior Associate of CWC Limited chaired the summit on both days.

Presenting his dissertation titled "Pakistan Gas Sector: Meeting the Energy Gap through LNG", in the second session on Day Two, Mr. Munawar Baseer Ahmad, MD SSGC, concentrated on LNG supply integration with Pakistan's indigenous energy resources. His presentation included an overview of the investment scenario in upstream and downstream development of the industry, the current energy mix and outlook for the future, the emerging energy gap and the role of LNG as well as transnational pipelines in closing the gap over the next 25 years.

Mr. Ahmad informed the audience that Pakistan is already preparing to set up a LNG import terminal at Karachi with an initial capacity of 2.5 mtpa equivalent to 300 mmcfd of natural gas. The project with an estimated capital investment of US$400 million is set for completion in 2009, and will supplement indigenous supplies of gas, to ensure sustained availability of natural gas, particularly to the industrial and power sectors. He updated the delegates on the status of SSGC's integrated LNG import project and took them through the stages leading to the "first gas landing" expected in Q4, 2009.

While addressing the meeting, the MD SSGC asked the delegates to join him in observing a minute's silence in memory of over 75,000 people who died in the recent earthquake in northern Pakistan and Azad Kashmir.

Following the presentation more delegates turned up at the Pakistan stall, either to leave their cards or obtain contact addresses or drops off information about their respective companies. The SSGC team took the opportunity to respond to questions and establish first-hand networking with the delegates. The CWC 6th LNG World Summit was sponsored by world-class companies including King & Spalding LLP, Shell Global Solutions, RasGas Company Limited, EBARA, Freeport-McMoRan Energy LLC, Hoegh LNG, GAZPROM, Invensys, GE Oil and Gas, Banca Intesa, Linklaters, ERAS and Sui Southern Gas Company.


The SSGC, enjoying gas-marketing rights in Sindh and Balochistan Zone has emerged as a responsible corporate entity over the years and taking all the pains to cater to the future needs of its franchised area. In this connection it has come with an ambitious expansion plan which according to estimates cost over Rs36 billion capital expenditure till 2008. The project is to be financed with debt and internal funds in roughly the same proportion. This expansion covers the Phase II of the company's Gas Infrastructure Rehabilitation and Expansion Plan (GIREP-II).

The financial performance of Sui Southern Gas Company (SSGC) during 2005 was in line with expectations of profit after taxation increasing marginally by 2% to Rs1,013million last year.

Taking a look at key financials, operating profit declined 5% to Rs2,152million compared to Rs2,268million during FY04. Financial charges also depicted 19% deceleration to Rs563million.

The year also carries Rs6.2billion capital expenditure that was substantially higher YoY. Moreover, Rs4.7billion was capitalized as additions to the fixed asset base. The additional return was largely offset by excess Unaccounted for Gas (UFG). SSGC has mentioned that OGRA issues its final determination of revenue requirements at Rs55.14billion as against the company's claim at Rs55.99billion resulting in shortfall at Rs852million.

A major item contributing to reduction in revenue requirement was UFG for which the authority determined Rs694million being excess of UFG over the target at 6%. The sales volume and value respectively increased by 6% and 15%. An additional 1,424-km of mains and services were laid during the year. The customer base increased by 78,578 as a result of new connections. Transmission and distribution cost as a percentage of revenue was reduced from 7.4 to 7.3%.