TAS: A TREND-SETTING INITIATIVE FROM SSGC

Exclusive PAGE interview with Mr. Naeem-ur Rehman Akhoond, Senior General Manager, SSGC

July 03 - July 09, 2006

Early this year, Sui Southern Gas Company formally launched its Technical Advisory Service (TAS) with the aim of optimizing the use of natural gas and bringing about substantial reduction in energy and fuel cost for Customers.

TAS is geared towards providing expert consultancy and advisory services, free of charge, to industrial and commercial sector units using natural gas for captive power generation or other large-scale industrial applications. TAS addresses the need of such customers to have cost-effective systems and technology in place, for achieving optimal productivity as well as efficient utilization of natural gas and other energy sources.

PAGE talks to SSGC's Naeem-ur-Rehman Akhoond, Senior General Manager (Management Services) who also heads the Services Department, responsible for providing this trend-setting service. Here Mr. Akhoond explains the objective for launching TAS, its key focus areas, its benefits for Customers and the country in general, and the response received so far.

WHAT DROVE SSGC TO LAUNCH TECHNICAL ADVISORY SERVICE (TAS)?

As a model utility company, with a strong technological base, SSGC has in the last few years achieved significant improvements in its standards of service and efficient transmission and distribution of natural gas. It has also been the desire of the company to ensure optimal utilization of this vital natural resource.

Pakistan has seen a significant increase in the requirement of gas for power plants as well as captive power generation. However, as the gap between supply and demand is widening, the Government has had to put a cap on its utilization by the industrial sector. Also the bases for allowing gas to industrial customers have been under constant review. Previously, for instance, allowing gas connections to industrial units was conditional to their export proceeds being US$5 million or more.

In 2005 the Government's policy was revised and a go-ahead was given to gas utilities to give connection to captive power plants provided they were using fuel-efficient machinery and equipment.

Captive power can only be efficient if the machinery and system put in place is efficient. So the main reason for the launch of TAS was to help industrial and commercial customers achieve a high level of efficiency through the use of energy efficient systems such as HVAC and Co-Generation. Most existing power plants do not meet the policy set by the Government and continue to use inefficient processes which result in the loss of vital energy resources.

WHAT ARE SOME OF THE BENEFITS INDUSTRIAL AND COMMERCIAL CUSTOMERS ACCRUE FROM AVAILING SUCH A SERVICE?

Basically TAS stands to benefit both the parties the customers and, at the same time, SSGC. See, when one is using obsolete and inefficient machinery one is paying a heavy price. It is a worldwide trend today to use energy efficient equipments that are widely available now. Yet most organizations continue to use old refurbished machinery and in doing so only contribute towards the wastage of gas.

Turning this situation around would result in a win-win situation for all industrial and commercial sectors, SSGC and the country. By adopting new and more efficient Technology and processes, you conserve energy, save on operating cost and improve overall production efficiency.

HAS SSGC IDENTIFIED THE KEY FOCUS AREAS TAS WOULD BE CONCENTRATING ON?

Three main focus areas are being addressed by TAS for now, which would result in significant savings for industrial and commercial customers as well as bring about substantial reduction in the consumption of natural gas. The focus areas are, one, co-generation systems whereby industries using gas for thermal purposes would be able to do so more efficiently by reducing wastage of heat. The second focus area is HVAC (Heat Ventilating Air-Conditioning system), another practical solution for optimizing the consumption of gas in high-rise buildings or large office complexes. And the third area is Combined-cycle Power Plants, increasingly the option to make power generation more efficient and economical. All this, hopefully, would have a major impact in terms of protecting the country's eco-system as well.

WILL THE DOMESTIC CUSTOMERS BE ABLE TO AVAIL SUCH A SERVICE?

Only Domestic customers living in high-rise buildings and using HVAC stand to benefit from TAS directly indirectly they too would. Our primary focus at this point in time is on the industrial and commercial customers who consume over 80% of the gas we distribute.

HAS SUCH AN INITIATIVE BEEN TAKEN BY ANY OTHER OIL AND GAS UNIT IN PAKISTAN OR IS TAS TOTALLY A TREND-SETTER?

SSGC is the first organization that has moved in this direction. Basically the idea was conceived by our Managing Director, Mr. Munawar Baseer Ahmad, who is a very dynamic individual and is an accomplished engineering and corporate leader. It was in his mind a long time ago that the concept of TAS was born. Our Services Department turned it into a reality.

The fact is that numerous entrepreneurs and businessmen, from the private sector as well who have approached, appreciate this new service and have shown keen interest in working with us in optimizing the usage of gas in their office-buildings, complexes and factories. Let me narrate an interesting example. An industrial customer came to us with a huge demand for gas. We discussed the matter and agreed to adopt our system of evaluation where we scrutinize the documents, have our senior engineers personally visit the facility and assess the real requirement of gas. He then turns in a report to me or the senior manager responsible.

In this case it was clear that the estimated demand for energy was too high. I asked the client why he wanted to incur such unnecessary cost. First, there was the exorbitantly high cost of equipment, secondly, capacity would remain underutilized and equipment would remain idle, thirdly, maintenance cost would be higher, and finally, he would even end up paying more for the installation of gas supply.

We brought down his demand for gas and he was delighted. Here, there is education for everyone. The client gets education from a professional consultant i.e. SSGC, and does not have to rely completely on his own consultant for making the right decision. And I can tell you that since TAS was launched early this year, many units have benefited immensely from it.

WOULD TAS BE CONCENTRATING ON EXISTING CLIENTS OR WOULD THE SERVICE BE AVAILABLE TO NEWER INDUSTRIAL UNITS?

Basically, right now we are concentrating entirely on new projects, where according to government policy the equipment used must be 100% energy efficient. And there are no two ways about it. Remember that the TAS at SSGC is a recommending body for allowing new gas connections to such customers, while the MD is the approving authority.

Let me also add that we have put into place a TAS unit consisting of senior engineers involved in every aspect of energy management, from examining technical data to making engineering calculations based on site visits and their own research and knowledge.

After a gas connection is approved by the MD and installation work is completed, the TAS unit may depute any member to visit the facility to ensure that the gas supply is utilized for equipments mentioned in the applicant's enquiry form.

As far as existing customers are concerned, after TAS establishes itself further, we will approach those units that are still using out-dated, fuel inefficient machinery and explain to them that it would be for their own benefit and the benefit of the community at large to adopt technologically advanced processes. In fact, once we have a list of captive power units using outmoded machines, we will approach them and try to switch them to more efficient technology.

HOW WOULD SSGC ENSURE THAT THE INDUSTRIAL AND COMMERCIAL UNITS AVAILING YOUR CONSULTANCY MAINTAIN ENERGY EFFICIENCY AT ALL TIMES?

We have generated new forms which clearly spell out SSGC's conditions and criteria. If the client does not adhere to them or fail to ensure mandatory use of cost-efficient and environment friendly gas fired equipment for their captive power plants, the supply of gas will simply be discontinued. Legally, SSGC reserves the right to do so. Obviously, it will be a colossal loss for that particular unit.

TAS'S PUBLIC AWARENESS CAMPAIGN HAS SO FAR BEEN RESTRICTED TO A FEW PRINT ADVERTISEMENTS. DO YOU PLAN TO PROMOTE TAS EVEN MORE?

Let me tell you that despite only a few advertisements being released, the response of applicants has been tremendous. The number of applicants continues to grow as we work with interested parties and apprise them of the benefits of efficient technologies. I am happy to say that everyone cooperates fully with us and willingly provides us the documents we require.

AFTER YOUR PROMOTION AS SGM (MANAGEMENT SERVICES), HAVE RELEVANT ORGANIZATIONAL CHANGES BEING BROUGHT IN TAS IN TERMS OF JOB DELEGATION?

When my promotion was announced as SGM (MS), the MD, Mr. Munawar Baseer Ahmad asked me to continue looking after the Services Department, which is responsible for TAS until it is well on its way. In fact the MD is extremely keen on technology and it his vision that today SSGC is seen as a technology leader. And, as far as technical services are concerned, he is keen to develop TAS as well as other systems such as SCADA that ensures continuous reporting of gas data, vital for maintaining sustained gas flows and monitoring of gas to our customers.

ANNUAL ENERGY CONSUMPTION

 

PETROLEUM PRODUCTS

GAS

ELECTRICITY

COAL

FISCAL YEAR

(000 TONES)

%CHANGE

(MMCFT)

%CHANGE

(Gwh)

%CHANGE

(000 M.T)

%CHANGE

1995-96

15

11.8

582,868

6.6

41

5.8

3638

19.6

1996-97

15

0.0

597,799

2.6

42

3.4

3553

-2.3

1997-98

16

6.5

607,890

1.7

44

3.9

3159

11.1

1998-99

16

0.1

635,891

4.6

43

-2.9

3461

9.6

1999-00

17

6.7

712,101

12.0

45

5.3

3168

-8.5

2000-01

17

-0.7

768,068

7.9

48

6.6

3095

-2.3

2001-02

16

-3.9

824,604

7.4

50

4.2

3492

12.8

2002-03

16

-3.0

872,264

5.8

52

4.0

3768

7.9

2003-04

13

-18.4

1,051,418

20.5

57

9.2

5284

40.2

2004-05

14

6.3

1161043

10.4

61

6.7

6622

25.3

Avg. 10 years

.

0.9

.

7.9

.

4.6

.

9.1

Jul-Mar

.

2004-05

11,129

.

851,653

.

46,295

.

4,345

.

2005-06

10,109

-9.2

922,313

8.3

52,098

12.5

4,200

-3.3

Source: Hydrocarbon Development Institute of Pakistan