CNG, CPPs may face gas shortage in peak winter

ISLAMABAD: Compressed Natural Gas (CNG) and captive power plants (CPPs) may face a shortage of gas in the near future as the petroleum division has been mulling to ensure supply to domestic consumers and the export oriented sector during winter.
A meeting of the Cabinet Committee on Energy (CCOE) in this regard was held here under the chairmanship of the Federal Minister for Planning, Development, and Special Initiatives Asad Umar on Thursday.
As per details, the petroleum division presented the projected natural gas supply and demand position in the country for the coming winter during the meeting of CCoE.
During the course of CCoE’s meeting, petroleum division presented a detailed impact analysis of different policy options for the management of gas demand during winter 2021-22 (FY22).
It was informed in the meeting that the enhanced demand of domestic consumers is to be met through savings from captive power generation. The prudent pressure management plan will also be developed to ensure the stable supply of gas to the consumers.
Gas supply to CNG will be curtailed during the winters. Industrial activity will be a focus in the gas management plans, especially the export industry. The CCOE approved the demand side of the proposals submitted by the Petroleum Division.
It was further directed that the CCoE will consider the supply side proposals in the next meeting.
The CCoE also considered the summary presented by the Maritime Affairs Division on the construction of Oil Storage at Oil Installation Area Keamari, Karachi.
The meeting was informed that insufficient storage infrastructure at the ports creates a bottleneck in the supply chain and results in increased costs. To comprehensively review the situation and available options, the CCoE formed a sub-committee under SAPM on CPEC Khalid Mansor including member Energy Planning Commission, secretary Petroleum, and secretary Power. The sub-committee will submit its proposals to the CCOE within two weeks.
The committee also reviewed the monthly report submitted by the power division on the out of merit power plant operations due to network constraints. It was assured that a constraint removal plan for the encountered issues is already under implementation.
It is pertinent to mention here that the CCoE remained indecisive on the Oil Refinery Policy, 2021, noting
that a summary regarding deemed duty had already been tabled in the last meeting.
Therefore, it discussed but preferred to stay away from taking any decision in this regard.
The petroleum division had earlier linked 10 per cent tariff protection for the existing refineries on motor gasoline and diesel with the construction of up-gradation projects before December 31, 2025, in the new oil refinery policy 2021.
The energy ministry has been preparing a summary again with some changes like the incentives are capped at 30pc instead of the previous 40pc of the project cost.