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Sindh, Balochistan may not suffer gas shortage in winter

Southern Pakistan, including Sindh and Balochistan, is not likely to suffer from any gas shortage in the coming winter season, however, there will be a gas crisis in central and northern Pakistan, according to Asim Murtaza Khan, managing director of Pakistan Petroleum Limited.

“There is enough gas in the system to meet the demand of the southern region,” said Khan. “The shortage, however, would be in Punjab and Khyber Pakhtunkhwa.”

According to industry sources, gas demand in the southern region hovers around 1,400 mmcfd in the winter season, while the Sui Southern Gas Company (SSGC) is provided around 1,200 mmcfd of gas.

Meanwhile, Balochistan’s demand hovers around 45 mmcfd in summer, which surges to around 120 mmcfd in winter. However, a number of natural gas projects would be commissioned that would help to bridge the gap.

With the commissioning of a number of pipeline installation projects, additional gas would enter into the SSGC’s system, thus helping the company to meet the demand.

Several reports state that the Ministry of Petroleum and Natural Resources is working on a plan to introduce winter tariff, which will send prices up by 25 percent, after gas utilities start supplying liquefied natural gas (LNG) through their system.

The ministry officials believe that the country would be facing a shortage of 1.0 bcfd of gas in the upcoming winter season and LNG import, under a short-term plan, is the only option available to bridge this shortfall.

Following LNG imports, there are plans to charge the natural gas consumers a weighted average price by including LNG prices in natural gas prices. This would lead to an increase of 25 percent in gas tariff in case 500 mmcfd of LNG is injected into the system.

The industries of Punjab faced the worst gas shortage in the previous winter season and therefore, LNG import is an immediate short-term solution to tackle the problem. In this view, a ministry official said, “The government is also negotiating with India to reach a deal on LNG supply.”

The business community has been quite vocal regarding the gas situation, stating that there was no shortage in the country, but mismanagement and vested interests had created the gap in demand and supply of gas.

Business leaders have claimed that an artificial shortage of natural gas had been created in the country to promote the use of LPG and other imported fuels, as huge commissions were involved in such imports. The business leaders are unanimous in their view that unaccounted for gas is the biggest problem, which has increased to 12 percent from seven percent in the last three years.

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