SSGC ALL SET TO REDUCE GAS LOSSES

A COMPREHENSIVE PLAN IS READY TO CUT 7.9PC UFG, SAYS SGM (MS)

TARIQ AHMED SAEEDI
(feedback@pgeconomist.com)
June 28 - July 04, 20
10

SSGC has completed a detailed study on unaccounted for gas in the region it supplies gas to and planned to implement the strategies to curb wasted gas, said a senior official of the company.

Zuhair Siddiqui, Senior General Manager Management Services SSGC (Sui Southern Gas Company) said the plan would help the company to reduce unaccounted for gas from a significant over seven per cent of total gas supplied to Sindh and Balochistan.

LOSING PROFITABILITY

Sharing a glimpse of the multi-page plan as according to him the document is not to be made public, Zuhair said in an interview with Page it would go a long way to control the UFG that eats in to 7.9 per cent of total gas supply of SSGC.

Oil and gas regulatory authority allowed gas distributing companies in the country to revise upward consumer gas tariffs in January 2010. Under demand-supply shortfall strain and pressures of international lenders, it will likely give a green signal to another hike in consumer gas tariff from July 2010.

While the authorities are well conversant of the fact that price rise on energy products make public tend towards anti-state means of shielding against it, yet they readily permit a push in prices across the board. An example in electricity sector can be cited for understanding. Glacial tariffs of electricity are the chief reason of resurging power theft that only in Karachi makes 30 to forty per cent of total electricity supplied in the city. Independent analysts advised that such line losses could be lessened through controlling power theft in industries and such a move can also give a halt to uncalled-for increase in electricity tariffs.

CONTROLLING SIGNIFICANT LOSSES

The same suggestion holds water for the gas sector as well. Industries and power sector constitute top gas takers of SSGC that supplies 34 per cent of its total supply to power sector followed by general industries (28 per cent), domestic (18 per cent), fertiliser (7 per cent), CNG sector (6 per cent), four per cent Pakistan Steel, and just one per cent cement sector.

Zuhair said gas theft was high in industrial areas of its region. The founder company of SSGC initiated natural gas supply in Karachi in 1954 when sui gas field was discovered in Balochistan. Today's SSGC's 24,340 kilometre distribution network supplies gas to 928 cities, towns, and villages in Sindh and Balochistan. SSGC's most of the gas sales demand is met through gas fields in Sindh: Bhit, Zamzama, Sawan, Badin, Miano, Kandanwari, and other locations. Sui accounts only 12 per cent of the total supply of SSGC.

Gas reserves in the country are on the downward trend. The energy demand is increasing in the country. Gas is a prime fuel in the country making over 50 per cent of the energy mix. The demand of gas has been increasing for decades, but in recent time extreme volatility in international oil prices made the power sector eerily shift to gas-fuelled power generation. As compared to furnace oil the price of gas happens to be low. Therefore, power sector prefers to consume gas for generating electricity.

Zuhair Siddiqui said the company is trying to reduce rate of unaccounted for gas that keeps on increasing. The profits of the company saw a staggering decline of 74 per cent to Rs257 million for the year ended June 2009 from Rs991 million in the preceding year. The recent plan prepared by the company includes revamping of distribution networks and correcting or replacing of meters. The problem is as much in the transmission and distribution side as it is in meter billing, he replied to a question. Explaining his points, he said SSGC kick started a campaign to educate gas consumers about legal consumption of gas. The purpose was to motivate users to replace meters if their gas consumption increased beyond normal, Zuhair said. People run power generator on gas. It is not legal if domestic customer operates 5 kv or above 5 kv power generator on gas without informing the supplier or converting to commercial metering, he told. "Therefore, we promote through our campaign gas consumption by legal means." To a question, he said there were many domestic customers whose electricity usage was equivalent to 20 and 25 kv. He put this also in account of gas theft. When asked which of the company's operational areas have large proportion of UFG, Zuhair answered instantly 'Balochistan', but later saying with a pause in terms of volume Karachi accounts for highest sum of UFG. Alone gas consumption in a central town of Gulshan-e-Iqbal is equivalent to that in some parts of interior Sindh. "So it is quite understandable what may be the velocity of wastages." Balochistan is also an important place to be reckoned with because of the geo-political ambience in the country. Thirty three percent of total gas supply in the province is unpaid or goes wasted. It is four per cent in Karachi and overall 11.9 per cent in Sindh.

SSGC sold 288,813 million cubic feet in Karachi, 77,400 mmcf in interior Sindh, and 18,309 mmcf in Balochistan in financial year 2008-09. For the half year ended Mar 31, 2010, the company's sales gas volume to 2.23 million customers in Sindh and Balochistan stood at 293,570 mmcf. Domestic customers numbered 2.20 million, commercial 23,927, and industrial 3,857 as at Mar 31, 2010. SSGC also meets 100 per cent requirement of domestic gas meters in the country.

What are the ongoing activities of the company to bring down UFG? Zuhair replied, "For a service company largest like SSGC that has a turnover of $1.5 billion such things are common in Pakistan's environ." However, it should not be misconstrued as our complacency, he pleaded saying "we are taking measures, as said, to tackle the situation."

Rise in electricity tariffs has already sapped out the capacity of people losing buying power to fight against unabated price hikes. Another increase in gas tariff would make them to submit to vagaries of lives by acting upon doctrine of necessity or vested principles. If increasing prices is anything to do with erasing losses of operations, then grabbing white collar crimes committed in connivance with the employees will be the best way to do so.