Ogra Industry Report: Gas Utilities continue expanding its network despite a decline in production

Amid a constant decline in gas production, the gas utilities continue to expand their network to add more customers due to political pressures.

The production of natural gas production has witnessed a decline of over 6 percent during the financial year 2020-21.

The Oil & Gas Regulatory Authority (OGRA) presents its “State of the Regulated Petroleum Industry” Report for the fiscal year 2020-21.

The report contains the data regarding the growth of the mid and downstream petroleum sector, especially, Oil, gas, LNG, LPG, CNG, RLNG, etc., wherein, information is shared with regard to decisions taken in the national interest with future perspectives to safeguard interest of all stakeholders.

Natural Gas sector data

In F.Y. 2020-21 the indigenous gas production has declined by over 6 percent to 2,006 MMCFD from 2,138 MMCFD as compared to F.Y. 2019-20, whereas gas consumption has increased by over 5 percent which reaches 3,884 MMCFD from 3,683 MMCFD.

Pipeline network

The country has a huge network of 13,768 Km of transmission and 191,478 Km of distribution gas pipelines providing natural gas to domestic, industrial, commercial, and transport sectors.

The gas utility companies expanded their transmission and distribution network to cater to the demand of their new consumers. SNGPL and SSGCL have extended their transmission network by 37 Km and 17 Km respectively during FY 2020-21.  Similarly, SNGPL extended its distribution network by 7,141 Km and SSGCL by 929 Km during the same period.

Addition of new consumers

SNGPL has connected 371,618 new consumers during FY 2020-21 reaching 7.41 million total consumers on its network.

Whereas, SSGCL has added 95,436 new connections making a total of 3.21 million consumers on its network. Overall, there were 10.62 million natural gas consumers in the country by the end of the financial year 2020-21.  

Sector-wise supply of gas: The main consumer of natural gas was the power sector, consuming over 30 percent (1,305 MMCFD), followed by the domestic sector with 20 percent (862 MMCFD), fertilizer with 19 percent (829 MMCFD), General Industry 8 percent (365 MMCFD) and captive power 5 percent (203 MMCFD) of the total gas consumed during FY 2020-21.

In Province-wise gas consumption, Punjab’s share was 52 percent (1,426 MMCFD), Sindh 39 percent (1,052 MMCFD), KP 7 percent (190 MMCFD) and Baluchistan 2 percent (64 MMCFD) of total gas consumption during the year under review.

Natural gas supply during the year was 4,172 MMCFD compared to 4,050 MMCFD last year. Mari, Sui, Uch, Qadirpur, Kandhkot, and Maramzai, etc. were major gas fields.

Out of total gas supplies 1,153 MMCFD as against 1,057 MMCFD last year, was supplied by the gas fields/producers directly to their consumers and the remaining through gas utility companies.

Province-wise gas share: Sindh’s share in total gas supply has declined by 11 percent from 1,344 MMCFD in FY 2019-20 to 1,192 MMCFD in FY 2020-21, and Punjab’s share declined by 9 percent from 91 MMCFD to 83 MMCFD and Baluchistan by 1 percent from 335 MMCFD to 333 MMCFD.

Whereas the share of KP has increased by 8 percent from 368 MMCFD to 398 MMCFD during the same period. The share of RLNG has increased by 13 percent from 857 MMCFD to 969 MMCFD.

In overall gas supplies, the share of Sindh has declined from 45 to 40 percent, KP from 13 to 12 percent, whereas the share of Baluchistan and Punjab remain steady at 11 and 3 percent respectively.

The share of RLNG has increased from 29 to 33 percent during the period under review. 

Third-party access regime

OGRA formulated the Pakistan Gas Network Code (PGNC) which provides a uniform contractual framework for the third-party access arrangements in the country for use of gas pipeline transportation systems and it accommodates project-specific arrangements.

It also effectively and efficiently facilitates the transporter as well as the shipper to introduce and agree upon such specific provisions that could enable the execution of varying business models.

OGRA under Third Party Access Regime, in addition to the grant of licenses for the construction of LNG terminal to Energas and Tabeer Energy, has also issued licenses for transmission and sale of natural gas/RLNG to a number of applicants including KE, Enegas, Tabeer Energy and Shell etc.

OGRA under relevant provisions of TPA Rules 2018 and Pakistan Gas Network Code has been ensuring the allocation of pipeline capacity by transporters viz SNGPL and SSGCL for the interested shippers.

OGRA has also approved access arrangements between SNGPL and PFL as well as MPCL and PFL for allocation of pipeline capacity to respective shippers.

LNG sector data: LNG imports have increased by 13 percent from 857 MMCFD to 969 MMCFD during FY 2020-21 whereas its share in overall natural gas supplies has increased up to 33 percent from 29 percent compared to last year.

LPG sector

Around 61 percent of the LPG demand is met through local production and the rest of 39 percent was imported during FY 2020-21. LPG share in the country’s primary energy supplies is 1.3 percent.

The current size of the LPG market is around 1,292,539 MT/Annum which is 12.46 percent higher as compared to last year’s 1,149,352 MT/Annum. 

LPG consumption by the Industrial sector witnessed a huge increase of over 73 percent (from 184,328 to 319,265 M. Tons) during the current year whereas domestic and commercial sectors also observed an increase of around 1 percent each (from 472,056 to 475,678 M. Tons) and (from 492,968 to 497,595 M. Tons) respectively during FY 2020-21. 

In FY 2020-21 the import of LPG has increased by 12.51 percent and 24 percent in refineries production (from 161,434 to 200,019 M. Tons). LPG supplies from gas-producing fields declined by 5 percent from 593,061 to 560,922 M. Tons during the same period.

In F.Y. 2020-21 the current stats show that there are 23 operational LPG auto refueling stations, 11 LPG producers, 219 LPG marketing companies having more than 5,500 authorized distributors, and 56 LPG equipment manufacturing companies.

CNG sector data: In 2020-21 the natural gas consumption in the transport sector has gradually declined from 127 MMCFD to 108 MMCFD and more than 700 CNG stations have been closed.  The sectoral gas consumption has declined from 3.11 percent to 2.51 percent currently.

Oil Sector

In FY 2020-21 the import of crude oil increased by 27.82 percent as compared to the previous year which stands at 8.66 million tons from 6.77 million tons reported in FY 2019-20.

The import of finished petroleum products increased by 23.70 percent (10.02 million tons from 8.10 million tons).  However, the import of Aviation Fuel declined by 72 percent from 0.17 to 0.05 million tons during the same period.

Refineries

In FY 2020-21 refineries’ total production has increased by 14.48 percent which stands at 10.66 million tons as compared to 9.31 million tons in FY 2019-20.  

Consumption of petroleum products data: In FY 2020-21 the consumption of petroleum products has increased by 12.95 percent reaching 19.92 million tons as compared to the previous year’s consumption of 17.63 million tons.

In FY 2020-21 PSO has increased its market share by 3 percent from 44 percent in FY 2019-20 to 47 percent.

Storage facilities

The Oil Marketing Companies have set up their infrastructure in the form of storage facilities and built a storage capacity of 0.58 million tons for MS and 0.88 million tons for HSD at various depots spread across the country by the end of FY 2020-21.