LAHORE - The Sui Northern Gas Pipe Lines Limited has completed gas pipeline project worth Rs55 billion from Karachi to Lahore while second LNG terminal is almost ready for the supply of another 650mmcfd gas to bridge the gap of demand and supply in the system.

This was stated by SNGPL managing director Amjad Latif while talking to The Nation. With the induction of additional 600mmcfd RLNG in the system, there will be no significant gas shortfall, enabling the company to ensure smooth supply of gas to the domestic as well as industrial consumers in winter season, he added.

Amjad Latif said that he has instructed the officials to make sure that there should be no hindrance in the supply of natural gas throughout winters and that the citizens could have a comfortable time throughout the season.

On high cost of gas for Punjab textile industry, he said that SNGPL has no role in this regard, as the high tariff of gas in Punjab is due to 18th amendment in the constitution.

He claimed that Sui Northern Gas Pipelines Limited turned into a profit-making company, making profit in billions after he took the charge, as he brought the Unaccounted For Gas (UFG) to just 8 percent from high of 14 percent by controlling the gas theft, using latest technology.  

It is to be noted that the Sui Northern Gas Pipelines Ltd (SNGPL) posted strong profitability in 2QFY17 mainly on the back of higher operating profits which is linked with increased capital expenditure. The company earns a fixed 17.5 percent return on its operating assets which results in higher operating profits. The gas company earned Rs3.60 billion in the half year ended December 31, 2016, primarily on the back of a significant rise in the value of gas sales. The gas utility had booked a net loss of over Rs.216 million in the same half of the previous year.

Unaccounted for gas losses (UFG) has also been on the declining side driving the bottom-line of the company. UFG in 2QFY17 is estimated at 8 percent as against over 9 percent in same period last year.

Sales of the company were up by 51 percent to Rs.79 billion. However, gross profits remained flat. Other income surged to Rs4.6 billion in 2QFY17, up by 124 percent due to classification of interest income on late payment of gas bills as operating.

To a question, Amjad Latif said the SNGPL is one of the top companies in the country and its share price in stock market has gone up to Rs13/share mainly owing to upgradation work in the system.

Moreover, crackdown against the gas defaulters has improved our reputation, recovering more than Rs.4 billion from the defaulters in very short period.

To a question on judicious utilization of development funds in oil and gas producing districts, the Managing Director stated that the company is just executing body as it can initiate gas supply schemes only after approval of the government.

The MD said SNGPL regularly carried out system augmentation work in all regions without any discrimination and rectify complaints with regard to low gas pressure.  He said there is no ban on industrial and commercial connections and company is entertaining the applications strictly on merit.

Replying to another question on increase in gas rates, he said that the gas prices are fixed by the Oil and Gas Regulatory Authority (OGRA). There is a mechanism to enhance gas rates, as the company forwards request to OGRA which, after listening to all stakeholders including consumers, determines the prices of gas. The SNGPL profit increased mainly due to its control on theft and not due to increase in prices.

It is to be noted that the company has a network, spanning over 8,000km and having around 5.5 million consumers in Punjab and KP.