National gas transmission system remains at high risk

ISLAMABAD: In a major development, the Sui Northern Gas Pipelines Limited (SNGPL) has reduced local gas off-take by over 50 per cent from 800 mmcf (million cubic feet) to below 400 mmcfd to save national gas transmission system from the line pack pressure that increased to 5.230 billion cubic feet (bcf). However, the transmission pipeline system is not out of the woods yet.

“The SNGPL has informed the Petroleum Division that it has reduced gas off-takes from local gas wells by over 50 per cent but the line pack is not being reduced,” a senior official of the Energy Ministry told The News.

The SNGPL says the power sector is continuously consuming less RLNG and its current consumption rate is about 164 mmcf. This situation has led to a high system pack across the entire transmission network. The government’s state-owned company Pakistan LNG Limited has also managed to reschedule for December one LNG cargo from ENI, which was supposed to arrive in September.

Despite repeated requests and various communications, Petroleum Division officials said the RLNG consumption by the power sector remained at 164 mmcfd on August 30 (Friday). The average power consumption during the last five days has been less than 250 against the firm demand of 600.

This situation led to a very high opening pack of 5,230 mmcf on Saturday morning, which is unsustainable. The current off-take is still at an alarming level of being very low which shall result in further saturation of system pack beyond the operational limits, thus leading to an emergency situation. The SNGPL has already curtailed gas supplies from indigenous sources to the tune of around 400 mmcfd. Pressures at the Sawan well have already surpassed the level of 1125 PSIG. The Power Division needs to immediately increase the off-take as per the demand of 600 mmcfd to safeguard the SNGPL system.

The next step left with the top authorities, the official said, was to reduce the pace of re-gasification of LNG to slow the induction of RLNG in the system, but it will expose the country to massive demurrages and LDs in dollars as the offloading of 9 LNG ships per month at two terminals would get disturbed. This will certainly annoy Qatar, the country from which Pakistan is getting 9 LNG cargoes under two long-term agreements. The country is also getting one LNG cargo per month from ENI, an Italian company, under a 15-year contract. During the calendar year 2024, the officials said, the line pack of over 5 bcf had hit the main gas pipeline nine times, starting from April 2024 to date (August 31), putting the system in jeopardy, but the authorities have failed to find a sustainable way-out except the reduction of gas outflows from local gas fields and slowing down the re-gasification process of imported LNG. The normal gas pressure in the national pipeline is 4.5bcf. Since there is no gas storage in the country, the national gas transmission line is being used as gas storage.

More importantly, the exploration and production companies - OGDCL, MPCL, PPL, MOL, GHPL and others - have registered protest with the government on the reduction of gas outflows from local wells, arguing that this inflicts damage to the gas pressure in the wells and millions of dollars investment is required to regain the gas pressure.

The Power Division says it has reduced power generation based on RLNG as fuel, mainly because of the fact that the demand for electricity has decreased across the country on account of monsoon rains. The fuel cost of RLNG-based power plants is higher at Rs24 per unit and these plants fall last on the list of EMO (Economic Merit Order). “We run the power plants whose fuel cost is cheaper as per EMO and if the demand for electricity increases, those plants which generate costly electricity are put in operation.”

However, billions of dollars RLNG infrastructure including two terminals and one main transmission gas line along with LNG supply agreements was laid down just to ensure the sustainable supply of RLNG to four RLNG-based power plants having 62 per cent efficiency set up in Punjab. Now these plants are not being fully operated as they generate costly electricity.