Natural Gas Industry of Pakistan

By Hassan, Javed | Economic Review, November 1996 | Go to article overview

Natural Gas Industry of Pakistan


Hassan, Javed, Economic Review


The gas industry in Pakistan is the oldest natural gas industry of the world outside the North American continent. The first gas field was discovered in 1952 at Sui in the province of Balochistan. Soon after this discovery, a 16 inch diameter, 558 kilometre long gas transmission pipeline was laid from Sui to Karachi. This pipeline was commissioned in 1955. Karachi was the only major consumer centre at that item and the sales were of the order of 10 million cubic feet per day (MMCFD). AT present the gas sales in Pakistan is about 1700 MMCFD and the share of natural gas in the country's total supply of primary energy is more than 37 per cent.

Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGC) are the two major companies of the country which are involved in purification, transmission and distribution of natural gas throughout the country. SNGPL supplies gas to consumers in the northern part of the country. Its franchised areas include two of the four provinces of Pakistan - Punjab and Frontier. SSGC is responsible for the southern part of the country and supplies gas to customers in the remaining two provinces of Sindh and Balochistan.

Sui Southern Gas Company Limited

SSGC was established in 1989 as a result of the merger of two gas companies - Sui Gas Transmission Company Limited (SGTC) and Southern Gas Company Limited (SGC). SGTC was formed in 1954 with primary responsibility of purification of gas at Sui Field and to transmit the sweet gas to the consumer centre in the southern part of the country. Two distribution companies established in 1955, were responsible for the distribution of gas to consumers in Karachi and in towns en-route to the transmission pipeline between Sui and Karachi. These two distribution companies were first merged in 1985 to form SGC and later in 1989. SGC and SGTC were merged together to form SSGC.

SSGC is managed by a Board of Directors comprising of 14 directors. These directors are elected by shareholders for a 3 year term. The present Board was elected in November 1995. Syed Naseer Ahmed, Secretary Ministry of Petroleum and Natural Resources, is the Chairman of the Board and Javed Hussain is the Managing Director of the company. Being the holder of more than 70 per cent shares, government nominates/appoints most of the directors. About 6 per cent shares are held by individuals and foreign shareholders and remaining 24 per cent by companies and institutions.

SSGC is primarily involved in operations and maintenance of (i) gas purification facilities at Sui; (ii) gas transmission pipelines (iii) gas compression facilities and (iv) gas distribution pipelines. It purchases natural gas from 5 different sources and sells this gas to its customers in Sindh and Balochistan. SSGC also distributes liquefied petroleum gas (LPG) throughout Pakistan and manufactures gas meters for domestic and commercial consumers under a licensing arrangement with Schlumberger of France since 1976. SSGC operates under well established technical standards and practices of the oil and gas industry institutions, like API, ASME, ANSI and NACE.

In order to support its operations SSGC has appropriate infrastructural facilities spread over the two provinces of the country. SSGC's major infrastructure components comprising of gas transmission/distribution pipelines, purification facilities and compressor stations. SSGC shares with SNGPL the ownership of gas purification facilities at Sui. The present gas purifying capacity of Sui Plant is 700 MMCFD and another 240 MMCFD purification facilities are under construction. SSGC gas transmission system comprises of 2470 kilometers long high pressure pipelines of 12 to 24 inch diameter. A total of 62,600 horsepower compression facilities are installed on these transmission pipelines at 6 different locations. The gas distribution network of SSGC includes more than 17,600 km pipelines mains and service lines ranging from 1 to 20 inch in diameter.

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