gas distributiojn

8/3/2019 Gas Distributiojn

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TEAM JSYNOPSIS OF DESK RESEARCH

GAS DISTRIBUTION:Distribution is the final step in delivering natural gas to customers. While somelarge industrial, commercial, and electric generation customers receive natural

gas directly from high capacity interstate and intrastate pipelines (usuallycontracted through natural gas marketing companies), most other users receivenatural gas from their local gas utility, also called a local distribution company(LDC). LDCs are regulated utilities involved in the delivery of natural gas toconsumers within a specific geographic area. There are two basic types ofnatural gas utilities: those owned by investors, and public gas systems owned bylocal governments.

Distribution and Safety:Local distribution companies, maintain the highest safety standards to ensurethat preventable accidents are avoided, and problems with the distribution

network are remedied in a timely fashion. Many of the safety programsmaintained by utilities are quite similar to those of interstate pipeline companies.Safety measures at the local level include: Leak Detection Equipment:Utilities have in place sophisticated leak detection equipment, designed to pickup on leaks of natural gas from the distribution network. Utilities also addodorants to the natural gas to make it easier to detect a leak. Safety Education Programs:Utilities typically run natural gas safety seminars in schools, community centers,and through other organizations to ensure customers are well versed in naturalgas safety procedures and know what to do in the event of a leak or emergency.

Technicians on Call:Utilities maintain fleets of technicians on call 24 hours a day, seven days a weekto respond to customers' problems and concerns. Emergency Preparedness:Utilities participate in community and local emergency preparedness programs,educating and preparing for emergency events such as natural disasters. One Call Systems:Provides customers, contractors, and excavators with a single phone number tocall before commencing excavation or construction, to ensure that the pipelines,and other buried facilities are not damaged.

OPPORTUNITIES: E&P companies under Petroleum Exploration & Production Policy 2009 areallowed to contract with Natural Gas transmission and distribution companies


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and third parties, other than residential and commercial consumers, for the saleof their share of Natural Gas in Pakistan at negotiated prices in accordance withapplicable laws, rules and regulations.

Subject to overall market demand, E&P Companies may request and GOP willpurchase their share of pipeline specification gas through a nominated buyer

which is effectively controlled by it in acceptable daily, monthly and yearlyvolumes to meet the internal demand in an economical manner provided thereare no infrastructure constraints. The delivery point shall be at the field gate.GOP/gas buyer nominated by GOP shall pay the price for gas at the field gate asset out in this Policy.

SSGCL transmission system extends from Sui in Baluchistan to Karachi inSindh comprising over 3,220 KM of high pressure pipeline ranging from 12 - 24"in diameter. The distribution activities covering over 1200 towns in the Sindhand Baluchistan are organized through its regional offices. An average of about388,828 million cubic feet (MMCFD) gas was sold in 2009-2010 to over 2.2

million industrial, commercial and domestic consumers in these regions througha distribution network of over 37,000 Km.

SSGCL also owns and operates the only gas meter manufacturing plant in thecountry, having an annual production capacity of over 750,000 meters.

SSGC has an authorized capital of Rs. 10 billion of which Rs 6.7 billion isissued and fully paid up. The Government owns the majority of the shares whichis presently over 70%.

Oil & Gas are two of the major components of Pakistan's Energy Mixcontributing more than 85% to the total fuel share of energy production. Servingto the aggregate requirement of over 400,000 barrels of oil per day, 38% of thetotal supplies to the country's energy mix is met through imported oil.

After substantial completion of expansion program under GIREP-I, SSGC hasembarked upon the execution of Gas Infrastructure and Rehabilitation ExpansionProgramme-II as apart of its five year core investment programme to provide therequisite infrastructural capability and reliability commensurate with theanticipated expansion needs of its franchise area through effective utilization ofthe indigenous gas resources including Sawan/Miano and additional gas fromBhit and ZamZama and the expected availability from fields located in the blocks

of Zarghun , Khipro and Sanjhoro. In the 5 years from 2004-05 SSGC is going tospend estimated Rs 12 billion on GIREP-II & QPCEP-III with the normalexpansion of gas transmission and distribution system involving the extension oftransmission & distribution network by around 700 Kilometers excluding theproject still at conceptual stage.With the above mentioned expenditure SSGC will be able to transmit about 365MMscfd additional gas and the total transmission capacity is expected toenhance to 1650 MMscfd gas in 2008-09.


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Pakistan started Compressed Natural Gas (CNG) as a transport fuelprogramme through establishment of research and demonstration CNG refuelingstations by Hydrocarbon Development Institute of Pakistan (HDIP) at Karachi in1982 and at Islamabad 1989. CNG is now fast emerging as an acceptablevehicular fuel in place of oil. Pakistan is the largest user of CNG in the world.Large diesel vehicles (buses and trucks) being the major consumer of HSD are

now next target for substitution by CNG for economic and environmentalreasons.

The government is encouraging industry to shift from imported fuel oil tonatural gas in power generation with anticipated savings of US $400 to 500million. Use of compressed natural gas (CNG) is being encouraged in thetransport sector. More than 240 CNG stations are operational in the country,meeting the requirements of about 200,000 vehicles, and it is expected that byJune of 2003, more than 350 stations will be operational to further reduce theburden of imported fuel. Availability of liquid petroleum gas (LPG) has beenincreased, and its use as domestic fuel in rural areas is being encouraged to

conserve forest and wood resources. Accordingly, gas consumption is expectedto grow from about 2.5 billion cubic feet per day (BFCD) in 2002 to 5 BCFD in2012.

Natural gas, as the name implies, is found in gaseous form naturally,underground at varying depths and geographical formations. It is one of the mostabundant energy sources in Pakistan, and because it is produced domestically, itis not subject to foreign disruptions of price or supply. Comprised primarily ofmethane, natural gas is odorless and colorless when it comes out of the ground.After impurities are removed, the natural gas is introduced into the pipelinesystem where it is transported to the consumers.

Prior to distribution, a harmless odorant is added to the gas so any leakagecan be easily detected before an unsafe situation occurs. In addition to this"rotten egg" odor, natural gas has some built-in safety features. It is lighter thanair, so it will rise and dissipate into the atmosphere in the event of a leak. And ithas a very narrow combustion range, igniting only when mixed with air at a ratioof between 4 and 14 percent. Any mixture higher or lower than that range andnatural gas simply won't burn. It also requires a very high degree of heat, atleast 1200 degrees Fahrenheit, before it will ignite.

Once combustion occurs, natural gas is one of the cleanest-burning fuelsavailable today. When it is burned properly, the only emissions are carbondioxide (which is what we exhale when we breathe) and water vapor. Because ofits clean-burning properties, natural gas has become the environmental fuel ofchoice for many residential, commercial and industrial applications. Suchapplications include: space heating, water heating, cooking, and as a fuel forfireplaces, vehicles, power plants, commercial and industrial boilers, as well ascommercial and industrial processing.

SNGPL got 3rd, 4th and 5th CSR National Excellence Award in 2008, 2009 and


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in 2010 and also got 7th Annual Environment Excellence Award 2010.

As Russia and China vie with each other to win the construction contract for the Iran-Pakistan gas pipeline project, Pakistan is expected to finalize an engineering andprocurement deal with Beijing, which may also provide financing in line with thegrowing energy cooperation between the two sides. It will good for gas sector.

The conceptual study of Project-IX is underway to carry maximum gas beyondMultan , to facilitate gas consumers from all walks of life in central Punjab andNorthern areas of the country. The basic intent of Project-IX is the elimination ofbottle necks in SNGPLs existing transmission network and to transport gas toindependent Power Plants in Punjab province, through system up-gradation withloop lines and system compression enhancement, beside construction ofpipelines to absorb additional gas available from gas sources of Potohar regionand newly discovered Gurguri-Makori field in Karak District of Khyber PakhtoonKhwa province.

RECENTLY COMPLETED PROJECTS:

SR.NO. ACTIVITY DIA (INCH) LENGTH (KM) COMMISSIONED ON

1 D.G Cement Line(Dera Ghazi Khan)

8 26 03/01/06

2 Shakardara- LachiLine

8 25.5 06/08/05

TOTAL 51.5 Budgeted Cost (Million Rs.) 314.00

THREATS:

SNGPL newly-appointed MD Arif Hameed has said that countrys industry is incritical situation and all gas matters will be resolved soon so that hurdle in the way ofeconomic activities could be removed. He said this while addressing to the delegation ofbusiness community led by Mian Muhammad Tariq Shafi, Regional Chairman FPCCI in ameeting here at SNGPL House, says a press release.

SNGPL has intention to boost up the economic activities at all hut the department isfacing severe shortage of gas.

Muhammad Tariq Shafi Regional Chairman FPCCI said that the productivity processand other economic development are being hampered by this energy crisis which alsocaused to increase the unemployment and inflation. He said business community isbeing compelled to shift their businesses. Pakistan has big reservations of minerals andworkforce but unfortunately no vision is being observed in this worst condition ofeconomy.

BOMB THREATS PANICS:


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LAHORE: A bomb hoax raised panic among Sui Northern Gas Pipelines (SNGPL)officials when an unidentified man told them about a bomb in the SNGPL building onKashmir Road, around 200 yards away from Governors House. Around 1,400 SNGPLofficials and more than 500 visitors vacated the building immediately. SNGPL officialssaid that an unidentified man called them around 10:30am and said that a bomb hadbeen planted in the building, which would explode within the next few minutes. TheBomb Disposal Squad (BDS) and law enforcement agencies searched the building, but

found nothing. Police sources said that the caller could not be traced because thebuilding did not have a call identification system.

SNGPL compromises with APTMA on gas load shedding. Baloch insurgents have intensified their attacks on vital gas pipelines and powertransmission pylons in recent days, depriving the entire province of power and gasfacilities for days and causing losses worth over Rs100 million to the Sui Southern GasCompany (SSGC).if these things happens again ans again then it will very difficult forSSGC to servive.

The IRAN pipeline is also a threatened project due to extreme pressure from the USon Pakistan as well as India not to go through with the project.

Gas supply is decreasing from last winter and different industries , CNG stations,power grid stations and houses had to face gas load shedding.

The Sui Southern Gas Company Limited (SSGC) is taking concrete steps to overcomethe issue of gas losses amounting to 50 percent. As part of such efforts, the companywith the assistance of a $200 million loan from the World Bank, SSGC intends toimplement a project named Natural Gas Efficiency Project for the main purpose ofreducing system losses and the rising tide of UFG.

Presently the SSGC is suffering line losses of about 400 mmcfd gas, having potentialto generate 2000 MW of electricity. 50 percent of the losses are due to leakages while the rest can be attributed to slowmeters, theft and measurement errors. If the situation continues to persist, the current8 percent unaccounted for gas (UFG), the company is faced with, will rise to 11 percentby 2016.

Understand and respond to their competitors' business structure and strategies, andcapitalize on their weaknesses. Stay up to date on the major developments affecting thecompany.

gas distributiojn

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