Gas consumers to pay extra Rs46b

The government is studying a proposal to set up 14 dedicated security wings, modelled on the CPEC framework, to protect gas pipelines and exploration operations in K-P and Balochistan, The Express Tribune reported. The total cost of Rs46 billion would be recovered from consumers through higher gas prices. Gas utilities have reported heavy losses from terrorist attacks.

Around 23 sabotage incidents on the Shewa and Bettani pipelines and SNGPL's northern network were reported over the last two years. Sources put the gas lost at 7,624 million cubic feet, and the financial loss at Rs12.7 billion to Rs27.7 billion, based on local and re-gasified LNG prices respectively. If northern supplies were fully halted, diverting costlier RLNG to meet demand would lift the utility's yearly revenue need by Rs97 billion, pushing its prescribed price from Rs1,719 to Rs2,052 per mmBtu this fiscal year.

Separately, the proposed E&P mechanism includes 10 dedicated wings, with a split of four for K-P and six for Balochistan, at an estimated cost of Rs30 billion. This sum would be divided into three equal shares of Rs10 billion among E&P firms, the federal government and the provinces. Recurring costs of Rs10 billion a year would be borne entirely by E&P companies, with no pass-through to gas consumers. OGDC's Bettani find under the Wali Exploration Licence is among recent discoveries that together feed 146 mmcfd into SNGPL's northern network.