Who’s responsible for power, gas crisis?; Hammad, Miftah face off in Geo News talk show

ISLAMABAD: A one-on-one hard talk was held between Federal Minister for Energy Hammad Azhar of the PTI, and former finance minister Miftah Ismael of the PMLN in Geo News talk show ‘Aaj Shahzeb Khanzada Ke Saath’ on the issue of current gas crisis in the country.

Both the political leaders held governments of each other responsible for the unprecedented gas shortage in even summer season. Miftah Ismael alleged that the industries in the country had never faced gas crisis in June earlier, and the fuel was not available in the country currently even if there was no dry-docking. He alleged that the government mismanaged the issue and the gas crisis could have been averted had the government acted wisely.

Responding to the allegations, Energy Minister Hammad Azhar said that the SSGC was currently observing shutdown, and it had no link with dry-docking. He said it was supposed to shut down in summer in any case, as its closure in winter would have caused more losses due to heavy domestic load.

He said dry-docking was starting from Tuesday [June 29], and the KPT gas-field, which had been shut earlier, would become functional on the same day. He said dry-docking would not affect SSGC system at large scale. The entire system consisted of 1,150mmcfd, and only 75mmcfd effect of dry-docking would go to the SSGC, and the rest would shift to the SNGPL, as the latter served all consumers in the upcountry.

Hammad said Miftah gave wrong figures about furnace oil use and completion of power plants in 2018. He said the power plants installed by the private sector continued running on 50% capacity for eight months, as full LNG supply had not been made to the government plants in 2018. He said he had complete data that there were various government power plants which were not converted to LNG for long, and those continued burning costly furnace oil. Hammad told Miftah that it was not a matter of Balloki and Haveli Bahadur Shah, but the consumption of furnace oil. He said the PMLN government burnt more furnace oil and the PTI government less, and the main reason for it was that terminals’ capacity utilisation was less during the previous government, calculated at 66%, while during the current government’s two-and-a-half years, it was estimated at 83%.

In response, Miftah Ismael said that the minister was not telling the truth, as the SSGC was still bearing consumption of 150mmfcd at the two terminals, and the claim that dry-docking would have no impact was unrealistic. The PMLN leader asked the energy minister to share information based only on facts. He said the PMLN had left the government in April, May 2018 when two plants had been commissioned, and the third one was commissioned in July 2018. After that, the PMLN was not in power for the next eight months.

He also rejected all claims of Minister Hammad that the power plants were commissioned in 2016-17, and that furnace oil was used by the PML-N government for producing electricity. He said the PTI government also failed to bring 12, or 14, cargoes of gas, as claimed by its ministers, and a 17-km long gas pipeline was also not laid so far despite passage of three years in power. He reminded Minister Hammad Azhar that he himself had promised laying the 17-km gasline. He said the PTI government was purchasing costly LNG and furnace oil, and creating hurdles for the export industry by conducting gas load-shedding in June.

In response, Hammad Azhar said that only one terminal was observing dry-docking, and only 75mmcfd was being provided there. The minister informed the PMLN leader that he had given him furnace oil use figures of the financial year, which ended in June 2018, one month after the PMLN left the government. He said he had also details of calendar year’s figures, which showed that 30-lakh-ton furnace oil was used in 2018, 10-lakh-ton was used in 2020, and so far 4.5-lakh-ton furnace oil has been used this year, and hopefully total consumption in year 2021 will also be 10-lakh-ton, the minister said. No wrong figures had been shared, the minister added. He said the PMLN leader was doing only political point scoring. Fact of the matter is that SSGC gas load-shedding was the result of exclusion of 177mmcfd of KPD, which was the Sindh gas pipeline, from 1100mmcfd system. He said the 177mmcfd would start returning to the main system from tomorrow [June 30], and only 75mmcfd would go out of the SSGC system from June 30 when dry-docking would start.

However, Miftah Ismael again rejected minister’s claim, saying 150mmcfd was going out of the SSGC and he himself had talked to the gas company authorities. He said the SSGC officials told him that they would reduce supply to entire Sindh and Balochistan system, and slash supply to the export and local industry by 50%, reducing it to the captive power level. He said most industries run here at captive power and the government had reduced gas supply to local industry to zero. He said that suspension of industrial units operations was causing joblessness and losses to the units. He asked the government why 14 cargoes were not brought in, as only PGPL could provide Pakistan seven-and-a-half cargoes, while six-and-a-half cargoes could be provided by Angroca. He said another ship is just arriving, and “now you are talking of dry-docking. You could have saved two, three days if you would have cooled off it before bringing in the cargo”.

Miftah said that the PTI government asked Qatar about a cargo at the last moment, and they refused to supply it. He said the PTI government could have averted crisis had it followed in the footsteps of the PMLN government regarding import of cargoes. He said there was lack of planning regarding maintenance and repair of the local field and going for two dry-docking at the same time in June was a wrong decision. He said three months ago, the PTI government was claiming that gas had been important more than capacity, and four months ago they said more power plants had been allowed in the country than requirement. But today, the country was facing load-shedding of both gas and electricity. What they done so far? They are purchasing on-the-spot gas for $12. Under the PMLN contracts, the country is getting gas for $6-7, but the PTI is purchasing it for $12, and who would be held responsible for it, he asked.

Programme host Shahzeb Khanzada asked Hammad Azhar why arrangements were not made earlier for dry-docking and local field maintenance as Karachi industries were also complaining that they had not experienced gas shortage in June earlier.

The energy minister said that the SSGC was cutting only 15% supply and providing 85% gas, and the government had instructed it strictly that there should not be any interruption in supply to the export units. From June 30, when the KPD gas field would be online again, the issues being faced by the SSGC and Karachi would be resolved fully. The consumption of 75mmcfd out of 1150mmcfd for dry-docking was not a big deal. He said three to four gas fields undergo maintenance every summer season, and there was nothing new in it. The minister said Miftah was talking of TPA [third party access] to terminals again and again, which showed his keenness about the TPA. But he must remember that the two terminals granted by the PMLN government had been facing NAB cases as well as international arbitration currently. Until and unless, the cases were settled, the PTI government could not bring those terminals in use. However, a licence for setting up a new terminal had been issued and work on it would start soon, added the minister. The private sector consortium has also ordered for the third FSRU [Floating Storage and Regasification Unit], and it is a matter of only six days. He said according to the international laws, the FSRU could not be operated after June 30. It’s mandatory to go for dry-docking twice in 15 years. It was a clause in the agreement signed by the PMLN government that the unit could choose any two dates of its choice in 15 years to go for dry-docking.

To a question by Shahzeb Khanzada that when the issue of litigation on the terminal had started, Minister Hammad Azhar said that litigation had been going for long. He said a 17-km long pipeline had been constructed, and the government was waiting for an end to litigation and arbitration, so that the pipeline could be brought into use. He said the real issue was not of cargo delivery. The government did have cargoes, and more cargoes could also be secured. The real issue is repair and maintenance of the terminal which converts offshore gas to on-shore gas, which need repair twice in 15 years under the international law. It would observe outage for six days, and ordering the RLNG had nothing to do with it. That was why the pressure was going to be converted to the SNGPL system during that period, he explained.

However, Miftah Ismael objected that why dry-docking had not been carried out earlier, as five years had already lapsed after the previous dry-docking. He rejected the minister’s claim about NAB litigation on a terminal. He said Minister Tabish Gohar visited Port Qasim on Sunday and ordered the PGPL terminal to conduct regasification of 750 million cubic feet gas daily. Shahzeb Khanzada asked the minister what was the real situation as Minister Asad Umar said in a TV talk show that he was assured by the minister for power that 750mmcfd gas would be provided by the other terminal, and Minister Tabish Gohar also ordered for it.

Hammad replied that in a Petroleum Division meeting, it was discussed that opinion of the legal experts should be sought, and if the terminal could be made operational despite litigation, that option should be opted for. He said it could help produce 100-150mmcfd gas, but the legal position was not clear till June 27. He said if Minister Tabish Gohar said that a legal solution had been found, it was good as it would also reduce gas shortage by 10-15%. The minister said that even if there were some legal hurdles, there were only two days when the gas supply would be zero. On the third day, 200mmcfd, on fourth day 400mmcfd gas would be restored.

Miftah Ismael said the PTI government had always been objecting to the gas and electricity contracts made by Prime Minister Nawaz Sharif. He said the PMLN government made gas purchase contracts for $7, and the PTI government was now purchasing it for $12. Isn’t inefficiency of the current government that it was purchasing gas by $4-5 costly than the previous government, as the former finance minister. He reminded the energy minister that during COVID, the PTI government was offered gas contract for only $3.70 for three years. But it did not sign the contract and now it is purchasing the same gas for $12, added Miftah. Was it inefficiency or corruption was involved in it, asked the PMLN leader. He asked why power plants of Bhikki and others were not being operated, which run on gas. In May, only 4300MW power was produced from those units, while you also have 5400MW LNG plants, 3600MW capacity plants installed by the PMLN government, 900MW of 4 Sisters, plus Nandipur. But the government was not operating all these units to meet electricity needs of the country, he added. Even the government lacked the capacity to carry out maintenance of these units, alleged the former PMLN minister.

To be concluded