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Fertiliser plants on SNGPL supply network: government accused of violating gas distribution policy




  • The Federal government is reportedly violating its own gas distribution policy for fertiliser plants: plants being run on gas provided by Sui Northern Gas Pipeline Limited (SNGPL) are not getting equal and fair treatment despite already defined distribution and rotation formulas. 

    Sources told Business Recorder that in sheer violation of government”s own policy for fair distribution of gas to SNGPL-based fertiliser plants, they are not getting equal and fair distribution by the gas company. “It is obvious from the current decision of resuming gas supply to a Multan-based fertiliser plant, which had already taken gas for 30 days (May 8-June 9) this year,” sources said. 

    In a meeting of the Ministry of Petroleum and Natural Resources held in Islamabad on May 8 this year, attended by representatives of APTMA and Fertiliser plants, it was agreed in principle that four fertiliser plants on SNGPL would get gas on rotation basis for a period of 30 days for two plants at a time. This decision was confirmed by the Secretary of the Ministry Petroleum & Natural Resources in a letter No: NG (1)-7(158)/11-LS-Vol-111 dated May 10, 2012. 

    In the first rotation, Agritech and Pakarab were provided feed gas for 30 days, beginning from May 8 to June 9. Engro Enven and DH Fertilisers were allowed feed gas in the second rota, beginning on June 10. However, their feed gas was suspended on June 16. The government diverted gas from DH Fertiliser and Engro Enven to the power sector much before the completion of their 30 days of rotation on the promise that when gas will be available, plants which had not completed their rotation will have the first right to available gas. 

    However, sources said that now the government has decided in principle to supply feed gas to a Multan-based Fertiliser plant, instead of DH Fertiliser and Engro, which had not completed their rotation. 

    “The government”s previous direction to divert gas supplied from fertiliser sector to power sector has been lapse on Sep 30 this year and SNGPL is likely to resume gas supply to the said plant from October 1 (today). As the Multan-based urea plant was instructed to carry out start up activities and run their utilities and gas turbines,” they added. 

    According to the previously devised government formula, SNGPL network-based plants were supposed to be provided gas on rotation for a 30-day period at a time. Now, according to sources, the gas is being supplied to a plant which was already provided gas for 30 days without any interruption, instead of resuming gas for the plants, whose gas was abruptly suspended after just six days. 

    “As per the agreed principles, if, for any reason, any network plant is denied gas for the stipulated 30 days per rota, the gas, when supplied, will first be given to such plants to complete the remaining days from the 30 days rota to ensure equal and fair distribution,” they maintained. 

    During 2012, DH Fertilisers and Engro Enven plants had been allowed feed gas for only 45 days compared with 75 days for Pakarab and 80 days for Agritech. Even now, when gas is available, instead of allowing its supply based on principles of fairness and equity, SNGPL once again demonstrated favouritism and blatant discriminatory behaviour and likely to start the supply of feed gas to other plants. 

    In this regard, MD SNGLPL also received written complaint from affected plants, in which they mentioned the above facts and called for gas supply in accordance with already defined formula. During 2011, two plants were extended preferential treatment and were allowed gas for more days than other two plants. 

    Later, a urea plant had approached the court. Despite Lahore High Court”s decision on petition against SNGPL”s discriminatory gas supply policy, the fertiliser plants are still being subjected to discrimination. 

    Copyright Business Recorder, 2012

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