DG Gas Presentation Final
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Transcript of DG Gas Presentation Final
Gas Sector in Pakistan
Presentation in Board of Investment
Islamabad - November 20, 2007
Directorate General Gas -Main Functions
Formulation of the Government Policies relating to Natural Gas, Liquid Petroleum Gas (LPG), Liquefied Natural Gas (LNG), Compressed Natural Gas (CNG).
Assessment and management of gas demand & supply. Allocation of Natural Gas from different supply sources to various categories of
consumers; Review and execution of gas price agreements with producers and gas sales
agreements between the producers and the Government nominated buyer; Assessment of consumer’s gas prices based on the prescribed prices, determined
by OGRA and making recommendations to the Government; Monitoring of receipts of Gas Development Surcharge. Implementation of the President/PM directives including Gas supply schemes of
the Parliamentarians that related to Khushal Pakistan Programmes I and II. Safety / security of gas pipeline in the country in consultation with Ministry of
Interior and Civil Armed Forces. Initiating summaries for Cabinet/ECC and NSC and implementations of
decisions thereof;
Pakistan Energy Supply Mix – 1992 to 2006
0
5
10
15
20
25
30
35
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Mil
lion
TO
E
Oil Gas LPG Coal Hydro+Nuclear Electriciy 50.4%
28.4%
13.8%
7.0%
0.4%
Total Primary Energy Supplies : 57 MTOETotal Primary Energy Supplies : 57 MTOE
Natural Gas
Sui
BALOCHIS
TANSI
NDH
PUNJA
B
NW
FP
Karachi
Sukkur
Islamabad
Peshawar
JAM
MU &
KASH
MIRMingora
Mirpur
Quetta
NORTHERN SOURCES125 MMCFD (SNGPL)
NORTHERN SOURCES125 MMCFD (SNGPL)
KHIPRO70 MMCFD (SSGC)
KHIPRO70 MMCFD (SSGC)
QADIRPUR550 MMCFD (SNGPL)
QADIRPUR550 MMCFD (SNGPL)
HASSAN20 MMCFD (SNGPL)
HASSAN20 MMCFD (SNGPL)
MIANO, KANDANWARI140 MMCFD (SSGC)
MIANO, KANDANWARI140 MMCFD (SSGC)
SAWAN280 MMCFD (SNGPL)120 MMCFD (SSGC)
SAWAN280 MMCFD (SNGPL)120 MMCFD (SSGC)
BADIN200 MMCFD (SSGC)
BADIN200 MMCFD (SSGC)
Multan
Lahore
DARU5 MMCFD (SSGC)
DARU5 MMCFD (SSGC)
DHODAK40 MMCFD(SNGPL)
DHODAK40 MMCFD(SNGPL)
CHANDA8-17 MMCFD (SNGPL)
CHANDA8-17 MMCFD (SNGPL)
GURGURI50 MMCFD (SNGPL)
GURGURI50 MMCFD (SNGPL)
PIRKOH + LOTI42 MMCFD (SNGPL)
PIRKOH + LOTI42 MMCFD (SNGPL)
SUI430 MMCFD (SNGPL)110 MMCFD (SSGC)
SUI430 MMCFD (SNGPL)110 MMCFD (SSGC)
ZAMZAMA190 MMCFD (SNGPL)130 MMCFD (SSGC)
ZAMZAMA190 MMCFD (SNGPL)130 MMCFD (SSGC)
BHIT300 MMCFD (SSGC)
BHIT300 MMCFD (SSGC)
MAZARANI10 MMCFD (SSGC)
MAZARANI10 MMCFD (SSGC)
KANDHKOT50 MMCFD (SNGPL)
KANDHKOT50 MMCFD (SNGPL)
MAKORI25 MMCFD (SNGPL)
MAKORI25 MMCFD (SNGPL)
BADAR12 MMCFD (SNGPL)
BADAR12 MMCFD (SNGPL)
REHMAT30 MMCFD (SNGPL)
REHMAT30 MMCFD (SNGPL)
MMCFDShare
SystemShare Total
SNGPL 1,958 63% 50%
SSGCL 1,150 37% 29%
3,108 100% 79%
Indept. 763 21%
3,871 100%
Major Gas Supply Sources
Sui
Indi
a
BALOCHIS
TAN
SINDH
PUNJA
B
NW
FP
Karachi
Sukkur
Quetta
Multan
Faisalabad
Lahore
Islamabad
Peshawar
JAM
MU &
KASH
MIR
AC1X-SUI
Iran
Gas Field
SSGCL Lines
SNGPL Lines CompressorStations
Major Load Centre
Pakistan Natural Gas Infrastructure
ITEM SNGPL SSGC TOTAL
Transmission (KM) 6,729 3,294 10,023
Distribution (KM) 52,932 30,173 83,105
Towns / Villages No. 1,019 1,533 2,552
Provincial Share in Historical Gas Production
871836 1,016
7119299
148
2,737
485
1,0771,419
2,241
3,871
0
500
1000
1500
2000
2500
3000
3500
400019
91
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
MM
CF
D
Balochistan NWFP Punjab Sindh Total
Provincial share 2006-07
Balochistan, 872, 23%
NWFP, 72, 2%
Punjab, 191, 5%
Sindh, 2,738, 70%
Sindh, 1,344, 40%
Punjab, 1,665, 50%
NWFP, 117, 3%
Balochistan, 225, 7%
Production Consumption
Total Gas Production : 1.414 TCF
(3,871 MMCFD)
Total Gas Consumption : 1.223 TCF
(3,351 MMCFD)
Sector-wise Gas Consumption (59% growth in 5 years)
Domestic, 386, 18%
Gen. Industry, 343, 16%
Power, 771, 36%
Transport, 12, 1%
Cement, 19, 1%Fertilizer (Feed)
13%
Comm., 56, 3%
Pakistan Steel, 37, 2%
Fertilizer (Fuel), 117, 6%
Total Gas Consumption: 1.223 TCF
(3,351 MMCFD)
Domestic, 512, 15%
Gen. Industry, 530, 16%
Transport, 155, 5%
Power, 1,453, 43%
Cement, 40, 1%
Fertilizer (Feed)13%
Comm., 86, 3%
Pakistan Steel, 45, 1%
Fertilizer (Fuel), 110, 3%
Total Gas Consumption: 0.768 TCF
(2,014 MMCFD)
2006-072001-02
Province-wise Consumption Pattern 2006-07
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Punjab NWFP Sindh Balochistan
TranspotPowerFertilizerCementGen. IndustryCommercialDomestic
1,665 MMCFD
(50%)
117 MMCFD
(3%)
1,344 MMCFD
(40%)
225 MMCFD
(7%)
Gas Sector Development
30.06.2001 30.09.2007 %age increase
No. of Towns/Villages 1,414 2,552 80%
Transmission (km) 7,444 10,023 35%
Distribution (km) 56,208 83,105 48%
Gas Sales (MMCFD) 1,411 3,351 137%
No. of Customers
Industrial 4,434 7,756 75%
Commercial 46,113 67,649 47%
Domestic 3,401,783 4,889,922 44%
Punjab NWFP Sindh Balochistan Pakistan
Domestic consumers 2,597,017 352,691 1,770,221 169,993 4,889,922
&age of population benefiting 19% 11% 27% 14% 20%
Projected Gas Supply (Without Imports)
Committed
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Committed Anicipated
Source: DGPC
MMcfdMMcfd
Projected Gas Supply (With Imports)
Committed
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Committed Anicipated LNG (FT) LNG I LNG II IPI
MMcfdMMcfd
Projected Gas Demand (Constrained)
Transport (CNG)
Domestic
Commercial
Gen. I ndustry
Cement
Fertilizer
Power
Captive power
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
MM
scf
/ Day
Domestic Commercial Gen. Industry
Cement Fertilizer Power
Captive power Transport (CNG) Others
MMcfdMMcfd
Source: SNGPL, SSGCL, DGPC
Projected Gas Supply-Demand Balance (Without Imports)
Committed
Anicipated
Gap
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Committed Anicipated Gap
MMcfdMMcfd
6066062,2152,215
4,2004,200 6,2526,252
Projected Gas Supply-Demand Balance (With Imports)
Committed
AnicipatedLNG (FT)
LNG I
LNG II
IPIGap
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Committed Anicipated LNG (FT) LNG I LNG II IPI Gap
MMcfdMMcfd
3,7923,792
Three pronged strategy to bridge the gap between gas demand and supply:
Maximize domestic production for which new policy has been
approved by the Government;
Transnational Pipeline; i.e. IPI, TAP and GUSA
LNG imports through private as well as public sector. i.e. Mashal LNG, GasPort, and Granada SBM
Strategy To Bridge The Demand-supply Gap
Natural Gas Allocation and Management Policy 2005
CATEGORY OF CONSUMERSPRIORITY
ORDER
Domestic and Commercial Sectors First
I. Fertilizer Sector; and
II. Industrial Sector (to the extent of process gas)Second
Independent Power Plants as well as WAPDA and KESC’s Power Plants with firm gas supply commitments under GSAs
Third
I. General Industrial Sector
II. CNG Sector
III. Captive Power (for export-oriented textile units)
Fourth
I. WAPDA and KESC’s Power Plants (other than those included in Third Priority Order)
II. Captive Power Sector (other than that for export-oriented textile units)Fifth
Cement Sector Sixth
Liquefied Natural Gas
Liquefied Natural Gas (LNG)
Government approved LNG Policy, 2006 on 6th April,06 under which complete freedom has been given to the investors to participate in any segment of LNG value chain.
Main features of LNG Policy 2006LNG Project Structure: Allow both Integrated or Unbundled Project Structures as may deliver best results i.e. lowest delivered Regasified LNG (RLNG) price for Pakistan.Right to Market and Transport RLNG: The investors allowed freedom to market and transport RLNG in Pakistan at their own risk and cost.Government Incentives: Accelerated depreciation for income tax purposes and waiver of import duty allowed.Licensing required from OGRA: OGRA is bound to issue license within 90 days for:
Ownership and operations of LNG terminal Right to market and sell RLNG Using existing pipeline infrastructure if available Construct and operate gas pipeline if required
Task Force established to provide one window facilitation.
SSGCL’s Pakistan Mashal LNG Project
Sui Southern Gas Company Ltd (SSGC) is working as project facilitator for Pakistan’s First LNG Import project called “ Pakistan Mashal LNG Project”.
The project is in its advance stages and close to selection of the Project Company / Developer.
The Mashal LNG Project is designed to import 3.5 MTPA of LNG (500 mmcfd gas ) in 2010/11.
ECC approved integrated project structure for this project on 2nd Feb,07 and gave go ahead to SSGC to obtain technical and financial proposals from the pre-qualified bidders.
Short listing of the pre-qualified companies done; SSGC sought price proposals from pre-qualifying interested bidders
on the basis of which successful project developer will be selected by the end of December 2007.
Private Sector LNG import initiatives
As per LNG Policy 2006, equal opportunity provided to private sector investors to import LNG and setup LNG terminals at their own risk and cost.
Presently, couple of private sector investor namely Pakistan GasPort Ltd. (PGPL, an Associated Group Company), and Granada SBM are pursuing LNG projects.
PGPL has signed an implementation agreement with Port Qasim Authority to setup an LNG terminal with an intent to import upto 400 MMCFD LNG.
Gas Prices
Wellhead price: It is paid to the producers in accordance with the Petroleum
Concession Agreements (PCAs) and applicable policy at the wellhead.
Prescribed price: It is determined by OGRA after taking into account the
following elements Average well head gas price Excise duty at well head Operating and maintenance costs Depreciation Return on assets (ROA) (17.5% SNGPL, 17% SSGCL)
Selling (Consumers’) Price: It is sum of prescribed price and Gas Development
Surcharge.
Composition of Consumers’ Gas Prices
Gas Producers
SNGPL
Consumers Consumers
SSGCL
Direct Sale
Consumer Gas Pricing Mechanism
Prescribed Price
Consumers’ Price
Wellhead Price
Breakup of Current Consumers’ Prices
Current weighted average consumer price is Rs 217.10 per MMBtu
T&D8%
Depreciation3%
Cost of Gas83%
ROA5%
GDS1%
Current Consumer Prices of Gas (w.e.f 01.02.2007)
Domestic Sector: Rs./million Btu
Over 0-50m3 per month 78.38
Over 50-100m3 per month 82.07
Over 100-200m3 per month 149.40
Over 200-300m3 per month 239.01
Over 300 m3 per month 310.92
Commercial Consumers 268.23
Industrial Consumers 238.38
CNG 264.87
Cement Factories 305.15
Fertilizer Companies:
Feed stock:
New 36.77
Old 91.52
Fuel: 238.38
Power Sector including Captive Power: 238.38
Liquefied Petroleum Gas
Presently around 1650 tons / day of LPG is being produced by 10 LPG producers and is being marketed by 63 LPG Marketing Companies.
Around 51 companies have been given provisional LPG marketing licenses.
The combined storage facility of all LPG marketing companies is around 28,000 metric tons. Two LPG import terminals located at Port Qasim, Karachi, are functional.
EVTL LPG import terminal has storage capacity of 4500 metric tons and through put capacity of 100,000 metric tons per annum.
Progas LPG import terminal has storage capacity of 6750 metric tons and through put capacity of 500,000 metric tons per annum.
Around Rs 6,000 million of investment has been made into PG infrastructure since December, 2006.
LPG Industry at a Glance
Liquefied Petroleum Gas (LPG)
Prior to September 2000, Ministry of Petroleum & Natural Resources (MPNR) was regulating LPG business all over the country under LPG (P&D) Rules, 1971.
In June 2000 the Cabinet decided to deregulate the LPG business. Since deregulation the Government is not fixing the price for the
producers as well as the consumers. In March, 2003, all LPG regulatory work along with LPG (P&D)
Rules, 2001 were transferred to OGRA. The role of MPNR is now confined to policy formulation only. First LPG Production & Distribution Policy has been introduced
in 2006;
Salient Features of LPG Policy 2006
To ensure that cartels are not formed for charging a high consumer price of LPG, OGRA will determine the reasonableness of price keeping in view the import parity price of LPG, producer price and audited accounts of LPG marketing companies for the last two years.
All LPG marketing companies receiving LPG from sources in Punjab and NWFP will be obligated to supply at least 7% of their local LPG in Northern Areas, 7% in AJK and 6% in FATA. All LPG marketing companies receiving LPG from sources in Sind and Balochistan will be obligated to supply at least 10% of their local LPG in Balochistan province.
80% of LPG produced from Chanda field (OGDCL) shall be distributed in FATA.
Any party can import LPG after paying applicable government dues. However, no party can export LPG without the prior written approval of MPNR.
LPG Producer Pricing Formula
In order to incentivise local LPG producers to increase their production and to ensure free flow of imported LPG to enhance its availability for LPG consumers at affordable prices, the government placed a floating cap on the producer price of LPG by linking it to the international price. The LPG producer pricing formula was approved by the ECC of the Cabinet in its meeting held on 06.12.2006 is as follow:
“The maximum base‑stock price of LPG for a given month should be equal to FOB Saudi ARAMCO Contract Price (CP) for Propane and Butane published in PLATTs for that month taking Propane‑Butane ratio equal to 40:60.”However, for the benefit of the consumers, the LPG producers will have complete flexibility and authority to sell product at a price on commercial considerations in accordance with market situation.
Compressed Natural Gas
CNG Sector Overview
Compressed natural gas (CNG) being promoted for economic and environmental benefits
1,834 CNG stations serving over 1.55 million vehicles; Pakistan 2nd largest in world, and largest in Asia.
CNG kits and dispensers are being manufactured locally Cabinet approved replacing diesel buses with CNG buses in 8
cities leading to new investment. CNG Policy is under finalization.
Thank You