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Allocation of gas to fertiliser sector: ECC discusses summary moved by petroleum ministry




  • The country’s fertiliser sector has to go a long way to have guaranteed gas supply for feed stock after the government decided to assign second priority to power sector after domestic consumers. Official documents showed that the Economic Co-ordination Committee (ECC) of the Cabinet, in its meeting on August 16 this year, discussed a summary of the Petroleum Ministry on “allocation of gas to fertiliser plants from alternate sources”.

    In pursuance to the decisions taken during the Energy Conference 2010, fertiliser plants on Mari Gas Company Limited (MGCL) system are getting uninterrupted supplies with nearly 12 percent curtailment. Furthermore, Fauji Fertiliser (Bin Qasim) connected with Sui Southern Gas Company Limited (SSGCL) system is also getting uninterrupted gas supply with approximately 20 percent curtailment. However, gas supply to four plants, located on Sui Northern Gas Pipelines Limited (SNGPL) system, has been suspended in an attempt to divert gas to the power sector.

    According to sources, the Ministry of Petroleum and Natural Resources is cognisant to the hardship being faced by the fertiliser plants on SNGPL system and is in the process of exploiting other options to make available the required volume of gas to the said fertiliser plants.

    One of the workable options is to allocate gas in equivalent quantities/volumes from alternate sources by dismantling respective Gas Supply Agreements (GSAs) of fertiliser plants with SNGPL. Petroleum Ministry was of the view that all existing gas producing fields have already been allocated either directly to consumers in some cases or to gas utility companies in most of other cases. It would, therefore, not be possible to allocate gas from these gas fields to the fertiliser plants.

    However, upcoming gas from existing fields and/or new discoveries may be dedicated to fertiliser sector, especially the four fertiliser plants on SNGPL system. The fertiliser plants would be allowed to directly negotiate gas supply arrangements with the producers. During the discussions, it was noted that relevant stakeholders, especially the Ministry of Water and Power, have not examined Petroleum Ministry’s proposals and, as such, its consideration should be deferred for the time being and it would be resubmitted later along with the comments of stakeholders.

    It was stated that because of the current energy crisis, first priority for allocation of available gas, after the domestic sector, ought to be given to the power sector in the light the Energy Conference discussions. It was explained that the Ministry of petroleum and Natural Resources was seeking only the approval, in principle, of their proposal and detailed modalities will be worked out later in consultation with the relevant stakeholders and would be placed before the ECC of the Cabinet for consideration.

    After detailed deliberations, the ECC accorded in principle approval subject to the condition that a detailed plan will be worked out in consultation with relevant stakeholders, including the Ministry of Water and Power, and submitted to the ECC for consideration/ approval. Insiders in the Petroleum Ministry are of the view that fertiliser sector is in close contact with the Awan-i-Sadr through Ijaz Gohar, the Chairman of Pakistan Textile Mills Association (APTMA).

    Copyright Business Recorder, 2012

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