MAJOR BREAKTHROUGH MADE ON IRAN-PAKISTAN-INDIA GAS PIPELINE PROJECT SNGPL SIGNS GAS SUPPLY AGREEMENTS WITH FOUR IPPS

KANWAL SALEEM, LAHORE
Aug 06 - 12, 2007

There was considerable increase in drilling activities in the country and more local indigenous gas recoveries are expected which would ultimately partly meet the gap between supply and demand of gas. At present, about 4 billion cubic feet gas is being produced in the country of which about 3 billion cubit feet is supplied through transmission network of the Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company (SSGC). This was stated by the Sui Northern Gas Pipelines Limited Managing Director, Mr. A. Rashid Lone while exclusively talking to PAGE. Mr. Lone said that out of about 4 billion cubic feet gas being produced in the country, one billion cubic feet gas is being directly supplied to the consumers like fertilizers factories and power plants. 'There was no shortage of gas in the country, however, Sui Southern Gas Company is working on a project to import Liquefied Natural Gas (LNG)', he said.

Talking about Iran-Pakistan-India (IPI) gas pipeline project, Mr. Rashid A. Lone said that there has been major breakthrough on this vital project, as pricing mechanism of the gas agreed by the three countries, while transportation tariff and transit fees issues are under discussion with India. After finalisation of all the issues including gas sales agreement, the Iran-Pakistan-India gas pipeline project is expected for completion within four years. To another query, Mr. Lone disclosed that Inter-State Gas Systems Limited is looking after the option of import of gas from Iran, Turkemnistan and Qatar.

He added that the present gas reserves in Pakistan are 32 trillion cubic feet, which as per present rate of consumption are good for about 22 years. He further said that the Sui Northern Gas Pipelines Limited has signed gas supply agreement with four Independent Power Producers (IPPs) to be located in the triangular areas of Faisalabad, Lahore and Gujranwala. The construction of these plants is in progress and is expected for completion in the year 2008. These plants are: Orient Power( 225 MW), Saphire Power (225 MW), Halmore Power (225 MW) and SAIF Power (225 MW).

Talking about gas losses, Mr. A. Rashid Lone maintained that a considerable work is underway to control the gas losses in distribution system of the Sui Northern Gas Pipelines Limited. In the year 2006-07, SNGPL has completed developmental projects worth 13 billion of rupees. In the year, 2007-08, the Company plans to undertake developmental projects worth 19 billion of rupees. The funding of these projects is arranged by the Company through local borrowing and self-cash generation. The SNGPL do not plan to borrow any money from international lending agencies.

Talking about Liquefied Natural Gas (LNG), Mr. Lone said that LNG is a costly gas because its prices have increased in the international market because of its increasing demand worldover. For Pakistan, LNG prices would be higher than the price of locally produced gas. Nevertheless, the price of LNG gas would be less than the price of high-speed diesel or furnace oil. He also disclosed that Sui Southern Gas Company is working on the import of LNG whereas a private party i.e. associated Group is also working on a similar project. The Liquefied Natural Gas would be available from the private party in the country by mid 2008.

Soft-spoken Mr. A. Rashid Lone who was anxious about wastage of gas in the country said that gas in Pakistan is a precious commodity. It needs to be conserved particularly by the domestic consumers who because of its low price tend to consume more gas in winter for water and space heating. This was not desirable for a developing country like Pakistan where economy is dependent on industrial production. Therefore, stoppage of gas to industry in winter was only due to wasteful supply to domestic consumers, he said. He exhorted upon the countrymen to use gas for rightful use and avoid its wasteful use. He stated that serious gap occurred between supply and demand of gas in winter months when the domestic gas demand increases 2-3 times. The gap is managed through curtailment of gas supply to industrial units, he added. Mr. A. Rashid Lone who kept his doors open used to meet visitors from public to redress the public grievances. He was not like other high-ups who usually avoid meeting the public.