Sui Northern Gas Pipelines Limited (SNGPL) has approved a pipeline capacity allocation of 50 million cubic feet per day (mmcfd) for Universal Gas Distribution Company (UGDC), marking the first transfer of industrial consumers to a private gas marketing firm in Pakistan, Dawn reported.
According to an official letter issued by the Lahore-based gas utility, SNGPL approved UGDC’s request for an additional 35mmcfd capacity — 25mmcfd on a firm basis until 2033 and 10mmcfd on an interruptible basis for six months. The company’s total capacity has now increased from 15mmcfd to 50mmcfd, requiring a corresponding increase in its security deposit.
SNGPL further directed that all outstanding dues owed by consumers shifting from SNGPL to UGDC must be cleared before transportation services begin.
UGDC Chief Executive Officer Ghiyas Paracha said the company would provide an advance deposit of Rs800 million to SNGPL and make monthly payments of about Rs1 billion for transportation and high unaccounted-for gas (UFG) losses. He added that UGDC would be purchasing gas at higher-than-LNG rates but supplying it to consumers at a lower margin.
Sources said UGDC would pay a 20% premium over the official gas rate set under the Petroleum Policy 2012.
The allocation followed a series of reversals by SNGPL. On September 11, the company’s board deferred its earlier decision from August 15 to allocate 35mmcfd capacity to UGDC. The earlier approval had been granted on the recommendation of the management and advice from the Ministry of Energy.
Separately, the Petroleum Division is considering a proposal to impose a captive gas levy on private distributors, including UGDC, to maintain parity between public and private suppliers.
