Islamabad-The government is considering various options for building Strategic Underground Gas Storages (SUGS) which will help avoiding gas supply disruption in peak demand season. The feasibility study for the Strategic Underground Gas Storage (SUGS), funded by the Asian Development Bank, will be completed by May 2021. Asian Development Bank (ADB) is funding the feasibility of the project and is providing $575,000 for the purpose, official source told The Nation.

The source said that the feasibility is being undertaken to establish Strategic Underground Gas Storage (SUGS) in Sindh, Balochistan and Khyber Pakhtunkhwa. To make the project cost effective various options for building Strategic Underground Gas Storage (SUGS) are under consideration, the source added. The options of using the depleted gas reservoirs and using fleet near the Floating Storage Re-gasification Units (FSRUs) are being examined. The usage of salt domes for the purpose of gas storage is also under consideration and will be covered in the feasibility study, the source maintained. When asked about the cost and completion timeline of the project, the source said that it depends on size, module and location of the storages. Some options and locations may be easier to build than others and may cost less as well, the source added. 

Meanwhile a statement issued by the Petroleum Division said that Special Assistant to Prime Minister on Petroleum Nadeem Babar chaired a meeting on development of underground gas storage facility. Asian Development Bank (ADB) is supporting this effort and a consortium of European oil & gas equipment companies is leading the study. 

While explaining the rationale for building Strategic Underground Gas Storage (SUGS), SAPM said that Pakistan had considered to build emergency stockpiles of gas to deal with supply disruption amid country’s growing domestic and commercial demand especially in winter. The construction of strategic underground gas storages (SUGS) is part of the Government’s policy to improve energy security and affordability in the country. 

At conclusion of the meeting, it was agreed by both sides to expeditiously complete the Study report on methodology of underground gas storages till May 2021, so that availability of funds for facility will be met in due course of time. Final report will provide blueprint for facility with respect to size, modulation and security supply of gas. Earlier, in 2019, Minister for Energy and SAPM on Petroleum had discussed the SUGS with ADB who agreed to undertake a feasibility study for the Project for which also allocated a Grant. Inter State Gas Systems (Pvt) Ltd., a fully government owned entity, will be the focal agency for the Project. Recently, ADB has completed its competitive bidding process and appointed the international consultant for preparing a feasibility study. Project infrastructure could be funded through Gas Infrastructure Development Cess (GIDC). 

The Strategic Underground Gas Storage facilities are crucial for the country in view of committed supplies of imported gas under the international gas agreements and fast-growing gas demand in the country to keep pace with the economic progress. The Project would also significantly enhance Pakistan’s capability to provide uninterrupted gas supply for sustainable economic growth.