Govt weighs Rs46 billion security plan for gas pipelines, E&P operations

Profit, citing The Express Tribune, reported that the government is weighing 14 dedicated security wings for pipelines and for exploration and production (E&P) sites, chiefly in Khyber-Pakhtunkhwa and Balochistan. Four wings would cover the Sui Northern Gas Pipelines Limited (SNGPL) network and its northern gas sources, while ten would protect E&P operations under a model based on the China-Pakistan Economic Corridor security framework. The plan follows mounting losses from terrorist attacks, including around 23 sabotage incidents over two years.

Losses from the incidents amount to roughly 7,624 million cubic feet of gas, about 25 LNG cargoes, with the financial loss estimated at Rs12.7 billion to Rs27.7 billion depending on the gas price used. Setting up the four SNGPL wings would cost Rs12 billion, plus Rs4 billion in yearly recurring spending, while the 10 E&P wings would require Rs30 billion. The Rs30 billion would be divided evenly among E&P companies, federal authorities and provincial administrations, and E&P firms would carry the full Rs10 billion yearly running cost.

Profit's report says E&P security would carry no financing cost, gas price impact or pass-through to consumers. By contrast, if northern supplies were fully suspended, switching to costly re-gasified LNG would increase SNGPL's yearly revenue requirement by Rs97 billion. That would push the prescribed price up by roughly Rs333/mmBtu, moving it from Rs1,719/mmBtu to Rs2,052/mmBtu this financial year.