S.KAMAL HAYDER KAZMI,
Research Analyst, PAGE
Jan 10 - 16, 2011
Sui Northern Gas Pipelines Limited (SNGPL) is the largest integrated gas company serving more than 3.4 million consumers in north central Pakistan through an extensive network in Punjab and Khyber Pakhtunkhwa.
YEAR TRANSMISSION NETWORK (KMS) % AGE INCREASE OVER PREVIOUS YEAR % AGE INCREASE FROM 1993 2005 6,121 5.97 84 2006 6,195 1.2 87 2007 6,625 6.94 100 2008 7,016 5.9 112 2009 7,347 4.5 122 2010 7,585 3.14 129
SNGPL has connected 377 new towns, villages, district head quarters (DHQs), and Tehsil head quarters (THQs) with its existing system, and has overall 1,921 towns, villages, DHQs and THQs on its network. In FY 2009-10, SNGPL provided 415 industrial, 3,663 commercial, and 258,585 domestic new gas connections, whilst 6,843 Km of distribution mains and 1,362 Km of service lines were laid in record time.
The company has over 46 years of experience in operation and maintenance of high-pressure gas transmission and distribution systems. It has also expanded its activities to undertake the planning, designing and construction of pipelines, both for itself and other organisations.
SNGPL operates in a region of the nation that has a rapidly growing demand for natural gas and power generation due to significant industrial development.
SNGPL transmission system extends from Sui in Balochistan to Peshawar in Khyber Pakhtunkhwa (KPK) comprising over 7,347 Km of transmission system. The distribution activities covering 1,624 main towns along with adjoining villages in Punjab and Khyber Pakhtunkhwa are organized through eight regional offices. However, the distribution system consists of 67,449 Km of pipeline.
Despite of these, the company has been able to earn gross profit of Rs5,613 million, net profit of Rs2,555 million and earnings per share of Rs4.65 for the year under review. The assets of the company have also increased over Rs15 billion. The company has also improved the quality of life of 262,663 families by giving them new gas connections, during the period under review. The company operates under a regulatory regime governed by Oil and Gas Regulatory Authority (OGRA). The regulator has been kind to recognise a long outstanding demand of the company for rationalising the Unaccounted for Gas (UFG) benchmark, in accordance with the prevailing conditions in the country and the aging network.
PROVINCE-WISE GAS RECEIVED 2008-2009
DESCRIPTION TOTAL (MMCF) AVG/DAY (MMCF) BALOCHISTAN Total 165,619 453.76 PUNJAB Total 55,882 153.1 KHYBER PAKHTUNKHWA Total 30,197 82.76 SINDH Total 401,460 1,100
During the year ended June 30, 2010, OGRA has raised the benchmark for the UFG to seven per cent against the upper and lower target of 5.5 per cent and 4.5 per cent respectively fixed earlier.
Furthermore, the late payment surcharge (LPS) has also been allowed as non operating income of the company. Revision of UFG benchmark and permitting LPS as non-operating income has positively affected the earning per share of the company. The company operates under a guaranteed 17.5 per cent rate of return covenant. After making all adjustments made by the OGRA, the total rate of return reduced from 17.5 per cent to 7.72 per cent by Rs4,989 million for expenses and UFG exceeding the prescribed targets. These deductions resulted in reduction of earnings per share by Rs5.91 while in Pakistan the supply of gas exhibited an increase of 1.6 per cent during July-March 2009?10. The increase in supply owes to higher production of 1.6 per cent in natural gas during the same period. Due to this increase in availability of natural gas, the overall consumption of gas remained higher during the period. The sector wise consumption of gas suggests that the household, commercial, fertilizer, and transport sector witnessed positive growth in consumption of gas during 2008-09.
FINANCIAL PERFORMANCE (AS ON JUNE 2010) RS '000
INDICATOR 2010 2009 2008 Net Turnover 161,629,828 168,933,831 124,155,033 Gross Profit 5,612,963 17,596,492 15,047,572 Operating Profit 9,145,373 2,383,422 4,770,056 Profit before Tax 3,880,143 1,730,240 3,980,809 Profit after Tax 2,554,563 930,536 2,496,690
Natural gas is one of the principal sources of energy for many of our day-to-day needs and activities. It is not surprising, then, that the natural gas industry generates a great deal of commerce in Pakistan and worldwide. Natural gas is one of the cleanest burning fuels available to all segments of the economy. Pakistan has signed a $7.5 billion deal with oil-rich Iran paving the way for laying the much-delayed natural gas pipeline that was originally envisaged to extend up to India. SNGPL is committed to achieve excellence in customer service and as such has created customer complaint centres designed to provide all required customer services. These will facilitate the customers and increase work efficiency in the country.