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KESC to get gas from new plant within four months

Discussion in 'Pakistan Economy' started by PakShah, Dec 20, 2011.

  1. PakShah

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    KESC to get gas from new plant within four months


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    - File Photo


    KARACHI: Petroleum and Natural Resources Minister Dr Asim Hussain said on Sunday that the Karachi Electric Supply Company would be given 100MMCFD gas on a daily basis from a dedicated liquefied petroleum gas-air mix plant in three to four months.

    Speaking at a news conference here, he said that the plant was being set up by the Sui Southern Gas Company at Bin Qasin to overcome the shortage of gas supply to the power utility.

    He was hopeful that this plant would lead to curtailment in electricity loadshedding for domestic and industrial consumers in the city.

    The minister said the KESC was installing a 600-megawatt power plant to meet the growing demand and some of the gas would be provided to the plant.

    He said the government would encourage LPG in the transport sector and was considering withdrawing sales tax and giving some incentives to bring the LPG prices close to the CNG, petrol and diesel.

    He said that the SSGC was facing a total shortage of 150MMCFD owing to which it had resorted to load management by cutting gas supplies to the KESC, CNG stations and the industrial sector. CNG stations would be closed for two days while industry would face one-day weekly closure, he added.

    Dr Asim claimed that 200 MMCFD gas would be added to the SSGC`s network by the end of June, 2010 through five gas fields while another 50MMCFD gas was also expected from two fields.

    About a midterm energy plan, he said that the government would encourage LPG over CNG for transport and commercial use.

    In reply to a question, the minister said that if all business went along unimpeded, the Pakistan-Iran gas pipeline project would be completed by 2013.

    In this regard, a consortium had already been formed and the government would appoint a financial adviser on the project shortly, he added.

    The minister said that the project would yield a net profit of $10 billion to the exchequer in 10 years after the commencement of the supply of gas from Iran. Further, the government was also paving the way for the import of natural gas from the Central Asian states.

    Similarly, a gas sale purchase agreement of Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline was in the final stage. “India has shown interest in 1.2 billion cubic feet (bcf) TAPI project and I am going to India to discuss the details,” he added.

    Replying to another question, Dr Asim said that Pakistan would save at least $10 billion due to reduction in gas tariff under TAPI project and subsequently under Iran-Pakistan gas pipeline.

    He said that there was a clause in the Iran-Pakistan gas pipeline project that prices would be renegotiated after the reduction in TAPI gas, which was 60 per cent of international crude prices.

    Regarding the issue of circular debt between the KESC and the SSGC, he said that the power utility started paying to the gas company.

    The minister said efforts for updating the existing gas reserves would ensure addition of at least 200 MMCFD gas by June 2012.

    On the other hand, work to explore liquid natural gas (LNG) was being carried on so as to find more resources for alternate energy in the country.He said that at a meeting with the federal finance minister the issue of circular debt was discussed in details and it had been assured that the issue of the circular debt would be amicably resolved during the current month.

    The resolution of the issue of circular debt would also result in promoting the opportunity of availability of the LNG, he added.

    It was the policy of the government to minimise CNG consumptions and let the LNG replace it, he said, adding that the government was making all-out efforts to resolve the energy issue.

    In reply to another question, the minister said that due to ongoing low gas pressure, the government was unable to prolong the gas load management policy more than a week.

    He said that keeping in view the high price of the LPG, the government would subsidise it for the domestic consumers and operators of the public transport.

    KESC to get gas from new plant within four months | Business | DAWN.COM