This is with reference to the news items that appeared in various sections of the media. SSGC deems it fit to clarify some assertions carried out in the news with some facts.
At the outset it must be clarified that the existing Gas Sales Agreement (GSA) with KE is for 10 MMCFD gas only, signed way back in 1978. SSGC is thus not obligated to supply gas to the KE beyond its contractual obligations.
It needs to be understood that SSGC is a gas utility Company which operates in a highly regulated environment. The Company prioritizes distribution of gas as per the Government of Pakistan’s Natural Gas Allocation and Management Policy with domestic and commercial consumers on top of the priority list. It is important to note that there has been 26 to 27% decline in the availability of indigenous gas during the last three years as against an ongoing annual growth in domestic customer base.
It must thus be clarified that since 2012 gas was being supplied to KE as per the orders of the Sindh High Court on Best Endeavor basis. Later due to depletion of indigenous gas reserves, SSGC started supplying blend of indigenous gas and RLNG as per the Cabinet Committee on Energy (CCoE) decision dated April 23, 2018.
Electric (KE) with malafide intentions to overcome its default on payments on the other hand filed Contempt Petition against SSGC for not supplying gas to it without disclosure of all the facts leading to reduction of gas by SSGC to KE.
SSGC submitted reply to Contempt Petition before Sindh High Court on the ground that KE is a defaulter of SSGC amounting to Rs. 153.02 billion in respect of indigenous gas bills, and Rs. 24.54 billion of RLNG bills up to August 31, 2022.
KE submitted its rejoinder to SSGC’s response and the Court granted adjournment for two weeks.
SSGC vide letters dated 12-11-2021, 28-03-2022, 4-04-2022 and 29-04-2022 had informed KE that the indigenous gas reserves / supplies are being depleted at the annual rate of 9-10% whereas there is an annual growth of 10 to 12% in the domestic sector. SSGC is therefore constrained to reduce indigenous gas supplies to KE.
The gas utility is trying its best to provide maximum Gas / RLNG and has not disconnected gas supply of the KE even after non-payment of the gas utility’s monthly bills since May 2022. KE has not signed the GSA as per the quantum of gas being supplied to it and as per CCOE directives of April 2018.
It is alarming to note that RLNG is an imported gas and any default ultimately leads to interruption of LNG supply chain and sovereign default. undermining the reputation of the country.
