SERIOUS CONSEQUENCES OF ENERGY SHORTAGE

DR. FAIZULLAH MD SSGC EXPLAINS THE SITUATION

AMANULLAH BASHAR
(feedback@pgeconomist.com)
Nov 8 - 14, 20
10

Despite producing 72 per cent of the total gas currently produced in the country, the province of Sindh especially the industrial consumers are confronted with an acute shortage of gas as well power load shedding of about 12 hours a day.

The situation is quite disturbing from export point of view. The export-oriented industries have expressed their apprehension that the situation might render them helpless to meet the exports commitments. Consequently, the curtailed supply of gas to the power producing companies including KESC adversely affects power supplies to the industrial, commercial and domestic consumers.

PROFILE OF DR. FAIZULLAH ABBASI

Dr. Faizullah Abbasi assumed office of Managing Director, SSGC on January 27, 2010. He succeeds Umair Khan who served the company as MD from July 2008 to December 2009. Before taking up his present assignment, Dr. Abbasi was Vice President of Metal Manufacturing Company, Arizona, USA.

Dr. Abbasi had a prolific stint as SSGC's Deputy Managing Director (DMD) in the mid-1990s. In his position of DMD which he assumed in May 1995, Dr. Abbasi headed the HR/Administration, Measurement/Meter Plant, HSE and later Gas Distribution Operations Divisions. As the head of HR, he carried out extensive organisational restructuring of the company in 1997.

Dr. Abbasi was assigned to control the rising incidence of Unaccounted for Gas (UFG) for all areas of distribution in Sindh except Karachi. In this area of focus, Dr. Abbasi developed a three-pronged strategy of rehabilitation/system maintenance and pressure profiling. These efforts bore fruit when in 1998 an appreciable decline in UFG was noted for the first time in ten years.

In 2001, Dr. Abbasi was invited by Gas Technology Institute of USA to present a paper on UFG at its conference on natural gas in Orlando, Florida.

Dr. Abbasi is a PhD in Metallurgical Engineering from Sheffield, United Kingdom. He attained his Masters in Production Management from Strathclyde University, Glasgow from where he also completed his post-graduate diploma. Earlier, Dr. Abbasi graduated cum laude in Mechanical Engineering from Mehran University, Jamshoro, Sindh. He was also a professor in Mehran University, his alma mater.

Explaining the situation regarding gas supplies Dr. Faizullah, Managing Director Sui Southern Gas Company in the sideline of a meeting told Page that it is important to set aside the impression that the shortage of gas was engineered by SSGC for recovery of huge dues payable by the KESC which is roughly estimated around Rs23-24 billion.

Dr. Faizullah said that he knows well the implications of curtailed gas supplies to power generators and at any cost he would not prefer money over the consumers comfort. In fact, the power supply was reduced due to closure of Zamzama gas field for maintenance purpose last week and now another gas field Bhit was also closed for the same purpose.

Actually maintenance of the gas fields is unavoidable as the gas fields start tripping and if the timely maintenance is avoided it may cause serious repercussions going forward. Hence, there was no option left but to go for closure. He however said that Zamzama has resumed production while Bhit shah will also go into production sometime next week.

Regarding the contribution of the province of Sindh in the energy sector, he said that at present Sindh is on the top of the list of gas production with its contribution of 72 per cent of the total gas produced in Pakistan. He however disclosed that of the total gas produced in Sindh, its share in gas consumption is hardly 30 per cent while the remaining amount of gas is distributed to rest of the country.

While giving a breakdown of the gas production in the country, he said besides 72 per cent produced in Sindh, Balochistan contributes about 22 per cent while remaining amount of gas is produced by Khyber Pakhtunkhwah and Punjab. Since gas is a federal subject, the decision of allocation of gas is taken by the economic coordination committee of the government. Under the franchise of SSGC there are some 15 gas fields, which are supplying gas to SSGC catering to the needs of Sindh and Balochistan.

Since the maintenance of the gas fields is an annual feature causing disruption in gas supplies, Dr. Faizullah said that SSGC is actively looking into alternative options for augmentation of gas supplies especially for power generation. In this regard SSGC and KESC are in negotiations for setting up a synthetic gas producing plant, which will exclusively supply over 100mmcfd gas to KESC for power generation.

Though the synthetic gas would be expensive compared to natural gas yet the KESC is also considering going for this plant in view of energy constraint situation prevailing in the country.

MEASURES TO AVOID LOAD SHEDDING

It may be noted that KESC usually avoids using costly fuel oil for power generation as its costs are above that the agreed power tariff and heavily relies on natural gas. In order to overcome the issue of load shedding of power supply, the government has recently offered an extraordinary favor to KESC to arrange supply of fuel oil to KESC at subsidised rates.

Hopefully this step would help reducing power load shedding of long durations. It may be mentioned that Finance Minister Dr Hafeez Shaikh had approved the subsidy for purchase of furnace oil and Syed Naveed Qamar approved the additional gas supply to KESC in order to end load shedding in industrial areas.

The consequences of load shedding were so serious that thousands of industries were on the verge of closure in Karachi rendering many a workers jobless.