Engro fertiliser plant is likely to be allocated required gas, as the Petroleum Ministry is striving hard to accommodate the company, official sources told Business.
Official documents available with Business Recorder obtained from Ministry of Industries reveal that the Economic Co-ordination Committee (ECC) of the Cabinet in its decision of October 23, 2012 had, in principle, approved the proposal presented by the Ministry of Petroleum & Natural Resources for allocation of around 202 mmcfd gas to the four SNGPL network-based plants from existing fields or new discoveries through a dedicated transmission system.
Gas fields identified for the purpose include KPD, Mari, RetiMaru, Bahu and Makori (TAL Block). The ECC also formed a committee to develop legal and commercial modalities under which the arrangement would be implemented. Pleading the case of Engro, the Petroleum Ministry said that it is understood that post finalisation of all legal and commercial modalities, execution of the scheme would require 12-18 months after which the gas supply to the fertiliser plants will commence.
According to the documents, Ministry of Petroleum & Natural Resources also claims that it is cognisant of the current urea supply demand situation in the country and is trying to ensure gas supply to the shutdown fertiliser plants to the maximum possible extent for increasing the domestic production in an attempt to reduce imports.
Out of the four SNGPL network plants, Engro’s new plant is located in very close proximity to the two fields ie Mari and RetiMaru and while gas supply arrangements through the permanent scheme will take time, gas supply to Engro can commence immediately from Mari & within 3-4 months from RetiMaru. Engro has expressed willingness to lay its own pipeline if Petroleum Ministry successfully pleads its case at an appropriate forum.
Petroleum Ministry has submitted following recommendations to the government: (i) to allocate gas from RetiMaru (11-13 mmcfd SNGPL equivalent), Sara West (around 60 mmcfd @ 125 BTUs = 7-8 mmcfd SNGPL equivalent) and Mari New Discovery (22 mmcfd SNGPL Equivalent) to Engro in the interim period. Engro shall be able to utilise this additional supply to maximise its production from its new state of the art energy efficient plant; and (ii) the arrangements required to have this gas consumed at Engro would not be in conflict with the permanent arrangement in consideration and gases upon completion of the transmission header shall be injected in the main header without requiring any additional work. The price of the gas will be $6 per mmbtu at RetiMaru and Sara West fields and $3.30 mmbtu at Mari Gas Company Limited (MGCL).