Stalemate on gas supply to fertilizer plants persists

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STAFF REPORT IBD: The Ministry of Petroleum and Natural Resources and fertilizers firms have failed to reach an agreement on the resumption of gas supply to fertilizer plants from the SNGPL network. A meeting, held here with Dr Asim Hussain, the PMs Advisor on Petroleum, in the chair, which discussed various options for resuming the gas supply to the fertilizer sector.

“We have discussed different plans with officials of the Petroleum Ministry, including provision of $400 million from receipts of the Gas Infrastructure Development Cess (GIDC) to fertilizer companies for the construction of 1,000-kilometre-long gas pipeline for utilisation of low BTU gas to subsidise the building and laying of gas transmission lines,” an official who attended the meeting told this scribe.

“The fertilizer industry has projected a cost of $300-400 million, for the pipeline to be laid by gas utilities (SNGPL and SSGPL),” a source in the fertilizer industry said, adding that the operating and maintenance cost of the pipeline will be recovered from gas consumers.

At present, as progress on this project remains sluggish. The ministry has, however, now agreed to a proposal put forth by the fertilizer industry; calling for funds for a transmission and distribution network from dedicated sources of gas. Fertilizer firms have supported the plan, which will divert gas to their plants from dedicated fields controlled by the OGDCL, Mari Gas and MOL Pakistan.


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