Sui Southern Gas Company Limited (SSGC) has served the cash-strapped Pakistan Steel Mills (PSM) with a notice of gas supply disconnection by July 28 as the state-run steel maker failed to pay its bills worth billions of rupees. The SSGC started further reducing pressure from 22nd of July, and there will be a complete gas supply disconnection by 28th of July, 2015.

The management of PSM has also replied to the notice of SSGC and sent the copies of the reply notice to Ministry of Industries and Production, Ministry of Petroleum and Natural Resources, Privatization Commission and other relevant high official of the Government of Pakistan regarding disconnection of gas supply of PSM.

The integrated plant of PSM especially two blast furnaces and coke oven batteries and other production units which are dependent on SSGC gas supply can not be shut down on temporary basis. Once they are shut, they are shut forever. The PSM plants are kept on heat round the clock.

Without heat the COBP and two blast furnaces and other production units of PSM will develop gaps/cracks and holes. The reconstruction and erection/repair and maintenance of the plants of PSM will cost Rs.10-12 billion and take 3 to 4 years to become operational again.

Pakistan Steel Mill (PSM) has already incurred fresh loss around Rs 3 billion due to very low gas supply by SSGC since 10th June, 2015. PSM has gained zero production during last 40 days. Whenever the PSM touched its peak production level during the last ¼ year the pressure of gas supply was curtailed.

PSM paid Rs2.20 billion to SSGC during the last fiscal year. The Ministry of Petroleum and Natural Resources and SSGC’s relevant officials would be responsible for any loss, damage or destruction of PSM plants due disconnection of gas supply.