OGRA computes RLNG transportation cost to Punjab at Rs81 per mmbtu

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ISLAMABAD: Oil and Gas Regulatory Authority (OGRA) has computed the transportation cost of Regasified liquefied natural gas (RLNG) to Punjab at Rs81 per million British Thermal Unit (MMBTU) for 2018.

As a result, the Sui Northern Gas Pipeline Limited (SNGPL) will generate revenues of around Rs25 billion during 2018, reported Dawn.

But the regulator has also contemplated raising transportation charges to Rs94 per MMBTU due to lower than promised supplies and revise the unit cost.

The initially computed transportation charges according to SNGPL took into presumption that RLNG supply into its system would rise from 600 million cubic feet per day (mmcfd) to 1,200 mmcfd from start of July 2017.

But due to delays in commissioning of 2nd LNG terminal, the RLNG supply in SNGPL’s system couldn’t touch 1,200 mmcfd till December last year.

SNGPL hence revised its RLNG sales volume taking updated figures till February 2018 into consideration which contributed to a rise in transportation charge per unit.

It also took component of volumetric and financial impact for unaccounted for gas (UFG) losses and determined the RLNG transportation cost at Rs93.63 per mmbtu for FY 2017-18.

However, OGRA in its computation noted the revision by SNGPL under mentioned head was carried on credible basis due to circumstantial changes which led to changes in estimated RLNG sales volume in reaching the transportation charge.

Ogra highlighted the company’s calculation of transportation charges added revenue shortfall requirement of Rs4.035 billion for FY 2016-17 had been included and requested the same be done again because of short recovery of RLNG price.

It defined transportation charge as the cost of transmitting the RLNG from southern to northern part of the company.

OGRA said SNGPL’s demand of including adjustments because of other RLNG constituents held no basis or logic.