Gas pipeline network to SEZs: SNGPL, SSGCL give cost estimates of Rs6.6 bn to govt

ISLAMABAD: Under the directives of Prime Minister Imran Khan to fast track the provision of utilities including natural gas to the Special Economic Zones (SEZ’s), the state-run gas companies including SNGPL and SSGCL have given cost estimates of Rs6.6 billion to the government for development of transmission and distribution of gas pipeline network initially to two SEZs.

New network expansion and cost estimates includes Rashakai SEZ in KP and Dhabeji SEZ in Thatta, both are priority projects under China Pakistan Economic Corridor (CPEC). Cost estimates of other prioritised SEZs are not included in it; however these estimates will be included later on, once the development plans of these SEZs get finalised, official documents available with The News says. For other prioritised SEZs too, for supply of gas and other utilities’ to industries is being under process.

Senior official sources said that prime minister has directed to the relevant ministries and departments for fast tracking the process of provision of utilities such as electricity, gas and road access to SEZs so that potential investors do not face any hindrance in investments and establishment of industries. Furthermore, any fluctuation in dollar price or other cost escalation shall be translated into cost estimates accordingly.

It is worth mentioning that the Economic Coordination Committee (ECC) of the Cabinet in its earlier decision has directed Petroleum Division for devising a plan for provision of gas to all existing industrial zones in consultation with provincial governments and Board of Investment (BOI). ECC has also approved that cost of provision of gas and electricity to SEZs will be met through PSDP and further asked the Ministry of Planning, Development and Reforms for inclusion in the PSDP 2019-20.

Under the PM’s direction, Finance Ministry is going to release funds of around Rs6-8 billion on fast track basis for facilitating gas and electricity provision to these SEZs. This is under process and soon the ministry would release the money, the official said.

Since there is almost surplus Re-gasified Natural Gas (RLNG) in the system and the government has committed off-take contract with Qatar, the government is also to expand gas distribution network in residential and industrial areas that are currently relying on other expensive energy sources, official said.

Official of the Board of Investment (BoI) said the groundbreaking of the first SEZ of Rashakai in KP under CPEC will be held very soon after the provision of utilities. He said, “Hopefully by end of this month, the government shall hold this event as there is pressure from the government for finalising provision of these facilities.”

There are dozens of Chinese and local companies waiting to be joined. Experts believe that mega project is a major opportunity to change the economic geographies of both the countries, especially of Pakistan under which both the countries plan to establish SEZs alongside this corridor in years to come.

The Petroleum Division in this regard had asked the SSGCL and SNGPL to provide detailed survey reports and cost estimates for laying down network up to the designated Zero Point (doorstep) of the notified and prioritized SEZs in consultation with the management of the SEZs.

Owing to availability of RLNG in the system, government has already relaxed the moratorium imposed in 2011 on the provision of new gas connections. Therefore, only RLNG can be made available for the SEZs and as such the supply of indigenous gas would not be possible due to ever increasing natural demand supply deficit and priority of provision of indigenous gas to the domestic and special domestic sector,” official who attached to this development process said.