Gas shortage:Punjab Industrialists mulling
shifting units to Sindh and Punjab?
ABDUL RASHEED AZAD

Industrialists in the Punjab irked by the severe gas supply suspension are seriously considering shifting their industrial units to gas producing provinces like Khyber Pakhtunkhwa (KP) and Sindh, it is learnt. 

Various industrialists from the Punjab province, while requesting the federal government to restore gas supply to the Punjab based industries, which was suspended on December 10, 2013 owing to the winter, have said that if the gas supply were not restored to their industrial units, they would be forced to shift their plants to KP or Sindh. 

Local industry and manufacturers have actively been engaged in making exports, but the shortage of gas may give an edge to the importers. However, the local industry play more important role in the economy as compared to the importers in expansion of industry and exports. As per Article 158 of the Constitution of Pakistan, the province where the gas is being explored should have the first right of usage. 

Interpretation of this article has been made by eminent lawyers of the country and each time it has been accepted as articulated in the Constitution that there is precedence over other parts of Pakistan in meeting the requirements from well-head in terms of usage of natural gas. According to Petroleum Ministry officials at present 67 per cent of natural gas is being produced by Sindh, 19 per cent in Balochistan, 9 per cent in KP and 5 per cent in Punjab. 

Out of a total national gas production of 4.2 Billion Cubic Feet per Day (BCFD) the Sui-Northern Gas Pipelines Limited (SNGPL) serving an estimated 4.1 million consumers in Punjab and KP is getting about 1.9 BCFD of gas, whereas Sui-Southern Gas Company Limited (SSGCL) which is facilitating about 2 million gas consumers in Balochistan and Sindh with around 1.200 BCFD. This clearly depicts that the distribution is much more in a province which is producing far less gas, but at the same time, he maintained that the Constitution must be upheld and gas producing province must get required quantum of gas. Throwing light on the current demand and supply position, he said that today there is a net shortfall of about 350 Million Cubic Feet Per Day (MMCFD) gas in the limits of Sui-Southern Gas Company Limited (SSGCL), whereas on the network of SNPGL total gas shortage stands at around 800 MMCFD. According to Mohammad Yasin Sidiq, Chairman All Pakistan Textile Mills Association (APTMA), Punjab based industries at present are getting gas supply for six hours a day and for the rest of the18 hours they are forced to operate on expensive sources of energy, which include Furnace Oil (FO), Diesel, Electricity and coal. 

He hoped that the situation will not reach at a point wherein industrialists will be forced to relocate their units to other parts of the country as this move will not only put additional financial burden on the factory owners, but will also increase unemployment level in Punjab. 

"We are of the belief that in coming few months the country will have additional gas production of around 400 MMCFD and at least 200 MMCFD of imported Liquefied Natural Gas (LNG). This will significantly reduce the on-going energy crisis in the country," Sidiq added. 

On a question, why in Punjab there is more gas load-shedding and shortage? An official of the Petroleum Ministry stated the following reasons: Firstly gas shortage of 800 MMCFD on the SNGPL's network as compared to 350 MMCFD on the SSGCL's network. Secondly, in the last seven years rampant connections were given in the territory of the SNGPL without realising what the supplies are and what will be projected supplies in future. From 2004 to 2009 more than 2,700 CNG connections were allowed on the network of SNGPL as compared to 700 connections on SSGCL's network. 

In SNGPL, the sale of gas was increased by 10 BCF, whereas the SSGCL increased only 1 BCF. The SNGPL laid the pipelines of 35,000 kilometers and increased the number of consumers from 3 million to 4.1 million with a capital expenditure of 80 billion rupees, whereas the SSGCL laid only 14,000 kilometers of gas pipelines and added 0.6 million new as consumers with an expenditure of Rs 43 billion only. 

The official said that seven years ago everything was fine in Pakistan and the total gas supply in the country was also around 3.9 BCFD still the country's entire industry and power sector was running smoothly. The question arises what happened in the last 6-7 years? The answer is very clear that more connections were given that what we had available to supply.
Curtsey:Business Recorder, March 12, 2014