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SSGC to get $200m from World Bank next week

The Sui Southern Gas Company (SSGC) has started hiring consultants for the natural gas efficiency project as the gas utility is expected to receive $200 million from the World Bank in the coming week, an official said on Monday.

Azim Siddiqui, managing director of SSGC, said that the company would sign an agreement with the government of Pakistan next week as the World Bank is giving the loan to government at just one percent markup.

“The funds would be utilised for infrastructure improvement and on the distribution system, as the network was 35 years old and needed replacement,” said Siddiqui. The project needs huge investment and the company could not do it on its own neither it could secure loans from the local banking sector, he said.

“Besides, the World Bank loan is quite feasible for us as it is on just one percent markup and the present tariff regime does not allow us to add financing cost in the tariff,” said Siddiqui.

The project, to be completed in five years, will help check unaccounted for gas (UFG) in the distribution system, including system segmentation and pressure management, pipe replacement and repair, cathodic protection and advanced metering systems, the official said.

An appliance efficiency pilot project will be initiated to finance modern and energy-efficient gas appliances for residential consumers and improving the organisational capacity of SSGC and customers’ orientation.

Officials say that the project will help increase the supply of gas to consumers, maintain adequate pressure, ensure better service delivery to consumers and improve the efficiency of the company.

In addition, the project would also help curtail emission of greenhouse gases through avoidance of direct methane gas leakages into the atmosphere.

UFG is the difference between total volume of metered gas received by a gas utility during a time period and the volume of gas metered as having been delivered to its consumers, excluding the utility’s self-consumption.

In Pakistan, UFG was recorded at 10.64 percent in 2011. UFG is typically one-two percent worldwide, the officials said.

The dollar equivalent of Pakistan’s UFG in 2010-11 was $323 million in terms of gas purchased and a petroleum substitution value three times higher if the volume of lost gas would have been channeled for power generation, according to a World Bank analysis.

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