Provinces disagree with Centre’s gas shortage estimates

ISLAMABAD – Showing disagreement with estimates of federal government regarding gas shortage in gas producing federating units, the provinces have once again reiterated their demand for implementation of Article 158 of the Constitution for gas distribution.

Khyber Pakhtunkhwa has Surplus Gas till 2030 and beyond and Article 158 and Article 172 (3), gave KP precedence to utilize gas produced in the province to attract investment, generate economic activities, employment opportunities, poverty alleviation and supply surplus gas to national grid, a representative of the KP government said while addressing a seminar organised by the Petroleum Division last week on Sustainability, Security and Affordability of Natural Gas Supply in Pakistan..

The SAPM on Petroleum had last week told media that based on domestic gas production and growing demand, Sindh would be facing gas shortfall in one and half years, KP in two and half years and Balochistan in about three and half years. He also said that gas pricing on the basis of weighted average cost of gas (WACOG) the combined cost of imported LNG and domestic gas was one of the options to address the challenge.

However the provinces had disagreed with the gas shortage estimates in the gas producing provinces and also to the proposal of WACOG.

According to the presentation of the KP government representative, KP gas production had shown upward trend during the past 15 years from just 23 MMCFD gas in 2004-05 to 450 MMCFD in 2019-20.

The current gas production in the province is 450 MMCFD while 40 MMCFD additional gas will be injected by December 2020. It is expected that gas production of 400 MMCFD to be added during 2022-2030 while total expected gas production by 2030 will be 800 MMCFD, the KP representative said.

In 2018, KP was producing 414 MMCFD gas (10.3 percent), Sindh 2585 MMCFD (64.7percent), Balochistan 851 MMCFD (21.3 percent) and Punjab only 147 MMCFD (3.7 percent). In 2018 Punjab was consuming 1999 MMCFD gas (50.4percent), Sindh 1403 MMCFD (35.5percent), Balochistan 361 MMCFD (9 percent) and KP 206 MMCFD(5.1 percent), the KP representative said.

As per Article 158 and Article 172 (3), KP has precedence to utilise gas produced in the province to attract investment, generate economic activities, employment opportunities, poverty alleviation and supply surplus gas to national grid. 100 MMCFD indigenous gas already committed for power sector can easily be diverted to KP industrial sector.

Quoting July-2020 statistics of DGPC, the representative of Balochistan said that the province produces 844 MMCFD where 401 MMCFD is consumed by the province while 443 MMCFD is being supplied to other provinces. 

Out of 401 MMCFD consumption within the province 281 MMCFD is being utilised for power generation i-e UCH Power Limited Phase-1 and 2.From 1000 MW of electricity 400 – 450 MW is being utilised in Balochistan and rest 550 – 600 MW is being utilised by other provinces.  

He said that the country’s gas production is 3,260 MMCFD against the requirement of 4,168 MMCFD. Further demand of 961 MMCFD is being fulfilled with import of gas in RLNG and other forms, which is very expensive as compared to the indigenous gas. Out of 961 MMCFD, 485 MMCFD is being used for power generation almost 50percent of the total import.

Balochistan representative further said that since decades Balochistan was contributing in the national gas pool as a major contributor and demanded that RLNG cost should be distributed to the end users instead of the single pool.

Sindh government had also demanded implementation of Article 158 and Article 172 (3) of the Constitution.

Article 158 said that “The Province in which a well-head of natural gas is situated shall have precedence over the other parts of Pakistan in meeting the requirements from that well-head, subject to the commitments and obligations as on the commencing day.”

Article 172 (3) said that “Subject to the existing commitments and obligations, mineral oil and natural gas within the Province or the territorial water adjacent thereto shall vest jointly and equally in that Province and the Federal Government.”