SSGC links Rs1 billion security deposit for gas supply to Sindh’s power plant

KARACHI: Sui Southern Gas Company (SSGC) has linked the gas supply to provincial government’s 100MW power plant in Nooriabad with the submission of Rs1.0 billion security deposit.

“SSGC is ready to supply gas to the power plant, provided the management of the plant submits the admissible security deposit of Rs1.0 billion,” SSGC said in a statement in response to Sindh chief minister Murad Ali Shah’s speech in the provincial assembly on Thursday.

Shah warned the federal government and the SSGC to cut off gas supply from Sindh to the country if Sindh’s concerns over gas distribution were not addressed by the end of this week. Shah also threatened that in case the SSGCL does not take the province's concerns into consideration then the provincial government would forcefully take over their offices.

"Sindh produces 70 percent gas of the total production and ironically the province is not getting it. We are not able to test-run a 100mg powerhouse at Nooriabad because SSGCL is not providing us enough gas," he said

SSGC, however, did not comment on the distribution of natural gas under Article 158, as it doesn’t come under its domain. Murad Ali Shah came hard on SSGC for not supplying 20mmcfd of gas to Sindh Nooriabad Power Company’s 100MW power plants.

Since the country’s law permits provinces to set up power generation facilities of any size, at any location and on fuel of their choice, the Sindh government decided to build, own and operate generation facilities at various industrial estates across the province.

Subsequently, Sindh Nooriabad Power Company was formed as a public-private partnership. The plant was scheduled to start commercial supply to K-Electric by April 2017. However, even the test-run could not be launched because of the unavailability of gas.

According to SSGC, necessary infrastructure in this regard has already been completed, which is in the knowledge of the plant’s management.  “As soon as the deposit is submitted, SSGC will connect the plant,” the statement said.

Furthermore, the Gas Sales Agreement (GSA) between SSGC and the management of power plant has already been signed. However, there were few amendments requested by the management of the power plant, which have been approved by SSGC’s board of directors, and need to be incorporated in the GSA with mutual consent.

Miftah Ismail, chairman SSGC, said he is ready to address all concerns of Sindh government, however, "any unilateral action will be a violation of the constitution." Ismail told Geo News that an agreement was signed between the Sindh government and SSGC on Nooriabaad powerhouse, according to it, whenever the Sindh government will provide a bank guarantee, the company will provide them the demanded gas quota.