Govt to say ‘Goodbye’ to Old Refineries
Aftab Ahmed
The PTI government has decided to say ‘Goodbye’ to decades-old oil refineries if they fail to upgrade in a year period in line with Euro-V products.
Special Assistant to Prime Minister (SAPM) Nadeem Babar on Petroleum announced this on Wednesday. He was accompanied by Federal Minister for Power Umer Ayub and Secretary Petroleum Mian Asad Hayaud Din and held a media talk with a selected group of journalists here.
He said that oil refineries except for Pak Arab Refinery Limited (Parco) had not been upgraded. He said that oil refineries would be asked to sell products at import parity prices.
Refineries would be given to upgrading their products in a year period, he said adding that they would also be given the option to export their products if they fail to upgrade.
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If oil refineries fail to upgrade products in a year period, the government would stop their operations within the country, he said adding that they would be asked to export their products.
He said that the government had introduced Euro-V petrol and ensure the import of Euro-V diesel from January next year.
He said that he was heading a working group on oil refineries and 70 to 80 percent agreement had been reached with oil refineries on a new policy. He said that policy would be submitted to the cabinet for formal approval.
LNG Pricing
The PTI Government has planned to impose a surcharge on gas consumers to recover the cost of RLNG.
Nadeem Babar announced that the gas companies-Sui Northern Gas Pipeline Limited (SNGPL) had requested the federal government for a proper mechanism to sell RLNG to domestic and commercial consumers.
He maintained that RLNG was defined as a petroleum product in the Oil and Gas Regulatory Authority (OGRA) Ordinance through an Act of Parliament. “Former Minister for Petroleum Shahid Khaqan Abbasi introduced and imposed RLNG as petroleum product since 2016 which need to be defined as gas again through Act of Parliament”, he added.
He further said that the ECC approval would be taken for the price mechanism and sent to the federal cabinet for approval.
The ECC decision provided a mechanism for recovery of past arrears of RLNG diversion made during the past two winter seasons on the SNGPL network, which stands at Rs. 74 billion.
Shortage of Gas in Karachi
Referring to the recent shortage of gas in Karachi, Nadeem Babar said that the Provincial Government of Sindh has not informed them regarding the decision taken in the Cabinet meeting on the right of way for laying down 17 km long gas pipeline from Pakland to Sui Southern Gas Company (SSGC).
“We have already completed work on 12 km long proposed gas pipeline and awaiting approval for the right of way to lay down rest of 5 km long pipeline”, he added.
He further said that out of 1200 mmcfd requirement of gas for Sindh, 900 mmcfd is utilized in Karachi alone. In case the provincial government allows to lay down the pipeline, the federal government will complete the gas pipeline by the third week of December to resolve the gas shortage by pumping additional RLNG gas.
He said the province is meeting 970 mmcfd from their own production and there is a shortfall of 70 mmcfd which would be met through RLNG.
Nadeem Babar further said that at the request of Industry in Karachi, the federal government is providing them gas at Rs 930 per mmcfd under five months (October-February 2021) arrangement. March-April onward, they would receive gas from the SSGCL system at previous gas rates.
North-South Pipeline Project
Referring to a question, he said the cost of the North-South Pipeline has been increased by changing its route and diameter of the pipeline. The new route of around 1700 km pipeline would be laid between Karachi to Lahore and the diameter of the gas pipe would be 48 inches to 56 inches
He said the capacity of gas transmission was also enhanced from 1 bcfd to 1.6 bcfd. The pipeline would have the capacity to increase the gas volume up to 2 bcfd keeping in view the future need of the gas which could reach up to 3 bcfd in the next ten years.
Pakistan’s side nominated a technical committee and awaiting the Russian side to announce their technical team so that the design, right of way of the proposed pipeline would be discussed. Two pipelines with compressors would be laid down, Nadeem Babar further said.
He said that the government has compelled to show progress on the proposed pipeline till February 2021 in line with the directive of the Supreme Court of Pakistan in the GIDC case.
Secretary Petroleum further disclosed that the Public Accounts Committee (PAC) also directed to carry out a forensic audit of the Inter-State Gas System (ISGS) on the delay of execution of the proposed gas pipeline project.
Unbundling of Gas Firms
Nadeem Babar further disclosed that the Petroleum Division is forwarding a proposal to the Cabinet Committee on Energy (CCoE) on Thursday (today) on “Unbundling of two gas companies-Sui Northern Gas Pipeline Limited (SNGPL) and Sui Southern Gas Company (SSGC)”.
In the first phase, the division proposed the energy committee to separate the transmission business of the gas companies to distribution. At a later stage, he said the distribution task of the gas would further be distributed among the small gas companies.
