Uninterrupted gas supplies to two Punjab fertiliser plants ordered

ISLAMABAD: Amid anticipated gas shortages during peak winter months (December-January), the Cabinet Committee on Energy (CCoE) on Thursday asked the Sui Northern Gas Pipelines Ltd (SNGPL) to continue supplying cheaper re-gasified liquefied natural gas (RLNG) to two Punjab-based fertiliser plants — Fatima and Agritech — for another 15 days to avoid fertiliser shortage.

The CCoE meeting was presided over by Minister for Planning and Development Asad Umar and attended by Minister for Energy Omar Ayub Khan, Minister for Information Shibli Faraz, Minister for Railways Sheikh Rasheed Ahmad, Adviser to Prime Minister on Commerce Abdul Razak Dawood, SAPM on Petroleum Nadeem Babar and officials from various divisions. The meeting also ratified memorandums of understanding (MoUs) with Independent Power Producers (IPPs).

During a presentation on winter gas situation, the meeting was informed that there would be gas shortage and pressure problems for one month between December and January as hydropower generation would decline owing to annual canal closure for maintenance and resultant shift in power generation to local gas and re-gasified liquefied natural gas (RLNG). As a result, overall gas shortfall could be around two billion cubic feet per day (bcfd).

The committee discussed the summary of Petroleum Division on natural gas load management during winter 2020-21. It was informed that domestic and export-oriented industrial sectors will face no disruption during the winters. The committee directed the ministry of energy to ensure prioritizing the residential and industrial demand during winter months without any load curtailment.

The total supply of gas (local gas plus RLNG) during the winter season will be around 4.5bcfd while the demand will be ranging between 6 to 6.5bcfd, leaving a deficit of about 2bcfd, an official said.

The Petroleum Division presented the mitigation measures for arranging additional gas for the season. Furthermore, an optimum utilisation plan for RLNG was also presented.

The CCoE also directed Petroleum Division to present energy efficiency programme for domestic natural gas appliances. It also directed to check gas theft taking place illegal use of compressors in the residential and commercial sectors.

The committee approved a proposal of Power Division for ratification of the MoUs signed with the IPPs that would allow power division to continue pursuing agreements, based on these MoUs, through the committee constituted for this purpose under the leadership of Finance Adviser Dr Abdul Hafeez Shaikh.

The committee was also informed that there would be around 130,000 tonnes of surplus fertilisers by end of the season. However, the Ministry of Industries and Production wanted to maintain stocks of 200,000 tonnes to avoid the repeat of sugar and wheat shortages and resultant price hike over last year. For this purpose SNGPL was requested not to shut the supply of gas to Fatima and Agritech for 15 days to help them produce up to 35,000 tonnes of urea.

Based on available data, indigenous gas-based manufacturers were expected to close the year with an inventory of around 400,000 tonness of urea. Additionally, the dealers would also have up to 320,000 tonnes of stocks against a historical average of 150,000-200,000 tonnes. Average demand this year is expected to remain around 5.9 million tonnes.