RLNG supply not feasible to fertilizer plants, facing liquidity crunch says, SNGPL

To avoid a liquidity crisis, SNGPL has requested the Ministry of Finance to release subsidy amount worth Rs1,332,184,376 against gas provided to both fertilizer plants from December 8th to December 31st, 2018 on an immediate basis

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ISLAMABAD: State-owned gas utility Sui Northern Gas Pipelines Limited (SNGPL) has said it cannot provide regasified liquefied natural gas (RLNG) supply to fertilizer plants due to problems linked to price differential in actual and sale price.

According to a report in a local newspaper, SNGPL chief financial officer, Sagheer ul Hasan Khan informed the Director-General Gas, Shahid Yousaf of this development.

The Ministry of Industries and Production (MoIP) on December 12th had instructed SNGPL to keep Fatimafert and Agritech operational till 31st January 2019 on 100% RLNG.

The gas price set for Agritech and Fatimafert was set at Rs782 per MMBtu for October-November in reference to 62:38 blend and with 100% RLNG for months of December 2018 to January 2019.

As per the state-owned utility, the payments being made by Agritech and Fatimafert were according to the rates set by MoIP at Rs782 per mmbtu instead of the RLNG price, which was causing liquidity issues and it was unable to meet its commitments to RLNG suppliers.

Consequently, to avoid a liquidity crisis, SNGPL has requested the Ministry of Finance to release subsidy amount worth Rs1,332,184,376 against gas provided to both fertilizer plants from December 8th to December 31st, 2018 on an immediate basis.

Sources in SNGPL said the Director-General Gas has been requested to arrange the release of subsidy worth Rs1,716,544,489 for January 2019 computed on the basis of December 2018 usage, which would be finalized at the time of billing established on actual usage by both fertilizer plants for the ongoing month.

 

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