Research Analyst
Feb 6 - 12, 2012

Sui Northern Gas Pipelines Limited (SNGPL) is the largest integrated gas company serving more than 3.9 million consumers in north and central Pakistan through an extensive network in Punjab, Khyber Pakhtunkhwa and Azad Jamu and Kashmir.

The company has over 48 years of experience in operation and maintenance of high-pressure gas transmission and distribution system. It has also expanded its activities as engineering, procurement, and construction (EPC) contractor to undertake the planning, designing and construction of pipelines, both for itself and other organizations.

SNGPL took over the existing Sui - Multan system from Pakistan Industrial Development Corporation (PIDC) and Dhulian - Rawalpindi - Wah system from Attock Oil Company Limited.

The company's commercial operations started with sale of an average 47 mmcfd gas in two regions viz. Multan and Rawalpindi, serving a total number of 67 consumers.

SNGPL was commissioned 203 km transmission pipelines and 5446 km distribution lines in FY2010-11. Thus, gas facility was extended to various localities/towns and industrial units across Punjab and Khyber Pakhtunkhwa. 12 inch dia x 47 km Mandi Bahauddin transmission pipeline was commissioned to improve gas pressure in SNGPL's network from Lala-Musa towards Jehlum.

The completion of Qadirpur compression project is yet another milestone, which was achieved by SNGPL. This project enhanced the overall capacity of the Qadirpur gas field by 100 mmcfd. The company takes pride for completing it on time in the face of challenging constraints and tight schedule.

SNGPL completed various flow lines as a contractor for MOL Pakistan including 12 inch dia x 19.7 km Maramzai Flow line, 8 inch dia x 14.7 km Mamikhel-1 flow line, 8 inch dia x 10.1 km AV1-AV2 trunk line and 8 inch dia x 5.40 km M8-VA1 flow line. The completion and commissioning of this gas gathering network helped secure additional 85 mmcfd to SNGPL's transmission system.

SNGPL has 3,451,142 consumers comprising commercial, domestic, general industry, fertilizer, and power and cement sectors.


Profit before taxation 258,467
Profit for the period 168,182

During the first quarter ended September 30, 2011, the gas sales for the period under review were 144,946 mmcf as against 145,507 mmcf same period last year.

During the period, the company earned profit after tax amounting to Rs168 million, giving an EPS of Re0.31. The widening gap between demand and supply of gas and resultant decline in bulk sales vis-a-vis total sales increased the unaccounted for gas (UFG), which reduced the profit of the period, as compared to corresponding period of last year. However, the management showed serious concern on the rising trend of UFG and is taking various steps to control it, including but not limited, to placing a remote monitoring and shutoff system to be installed on the connection of suspected consumers. The management is also confident to control the rising trend of UFG with the concerted efforts and necessary support from the law enforcing agencies.

Sui Southern Gas Company Limited (SSGC) is also engaged in the business of transmission and distribution of natural gas besides construction of high pressure transmission and low pressure distribution systems.

SSGC continues to face shortage of natural gas mainly due to decreased supplies from producers and increased gas demand.

Despite increase in the number of gas producing fields from 16 to 17 compared to corresponding period last year, the supply of gas dropped four per cent to 98.8 BCF. The average wellhead purchase price rose 12 per cent and stood at Rs297.76 per mmbtu. The gas distribution system was extended by 470 km while another 42 km of distribution lines were laid under the rehabilitation projects to curtail leakages.

During the period under review, the company's customer base increased to 2.384 million. It provided 30,678 domestic connections in the first three months of the current financial year (2011-12).

The meter manufacturing plant produced 167,607 meters versus 168,250 meters in the corresponding period last year, i.e. a decrease of 643 meters or nearly 0.4 per cent.

The sale to SNGPL declined by nine per cent to 97,200 meters as compared to 107,100 meters in the corresponding period last year. The increase in cost of production by 14 per cent resulted in decrease in profit to Rs17 million as compared to profit of Rs46 million for the corresponding period.

In the three months, the capital expenditure was Rs1,398 million as compared to Rs2,784 million for the previous corresponding period.

Addition to operating fixed assets was Rs224 million versus Rs929 million in the corresponding period last year. SSGC posted after tax profit of Rs796 million during the same months as compared to profit of Rs1,113 million for corresponding period in 2010.

The company suffered a reduction in revenue of Rs900 million in its tariff return in the three months period on account of UFG.

The company plans to maintain its focus on UFG projects and is planning to initiate major capital expenditure project with primary objectives of UFG reduction.

Due to continued supply constraints, year to date, gas sales decreased five per cent to 88.3 BCF as compared to 92.6 BCF in the corresponding period last year.

The average sales price per mmbtu increased eight per cent to Rs367.44 versus Rs341.51 due to increase in consumer prices by OGRA, thus gas sales revenue (net of GST) increased only three per cent.