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. All transmission pipelines are monitored through a comprehensive
telecommunication system and the distribution system is controlled through a Supervisory
Control and Data Acquisition (SCADA) system.

SSGC's domestic meter manufacturing plant is located in Karachi which has an annual capacity
of manufacturing 300,000 meters of two different types, G-6 and G-4, LPG marketing operations
of the company comprises storage facilities at 4 locations with a total capacity of 900 metric
tonnes (MT) and LPG filling plants at 3 locations with a capacity of 90 MT per day. SSGC
serves more than one million consumers of natural gas in Sindh and Balochistan provinces. Since
1993 the customers growth rate has been around 11 per cent per annum. Majority of customers -
about 74 per cent - are in the household category and are located within Karachi. New
connection are provided to consumers each year. About 293,000 new gas connections have been
provided to consumers till June 1996.

SSGC employs and maintains a team of competent professional staff to run its operations
effectively. Its staff is well-experienced in their respective fields. The present strength of SSGC
staff is 5,500 which comprises of 1,350 executives and 4,150 non-executive staff. SSGC helps its
staff improve and update their expertise in respective fields, based on world-wide gas industry
practices, by arranging specialised training programmes locally and abroad. In 1995-96, SSGC
has arranged 60 man-months of foreign training programmes for its staff through Canada and
UK based gas industry firms.

Ongoing Projects

Kandanwari Gas Transmission Pipeline from Kadanwari gas field to Karachi, comprising of 134
km of 24 inch diameter and 264 km of 20 inch diameter pipelines, has been completed during
1993-95

Some non critical items are in progress. Quetta Pipeline Capacity Expansion Project Phase 1 has
been completed with an expenditure of more than Rs.525 million. After government's approval
Quetta Pipeline Capacity Expansion Project Phase II has also been started and will be completed
by the end of 1998. Gas Purification Plant First and Second Facility Projects are in construction
stage and are expected for completion by mid 1997.

Future Prospects

Government is aware of the present situation of the acute shortage of gas and is taking numerous
measures to narrow down the prevailing and expected gap between demand and supply. It has
taken a number of policy decisions to boost the exploration activities in the oil and gas sector. A
number of incentives have been offered in the 1994 Petroleum Policy, to the oil and gas
companies interested in downhole and surface activities. The most important of them is that the
producer price parity has been indexed to a basket of Arabian or Persian Gulf crude oils.

The government is also planning to import gas from nearby countries to fill the gap. MoUs have
been signed with Qatar, Iran and Turkmenistan for such imports. The plan of gas import from
Qatar is in the most advanced stage. Negotiations are in progress with the joint venture company
which will construct the proposed pipeline from Qatar to Pakistan. The average-day quantity to
be imported from Qatar would be 1600 MMCFD. Same quantity is planned for import from Iran
whereas that from Turkmenistan will be 2000 MMCFD. This import is likely to start from year
2001.

In addition to import of gas through pipelines, option of liquefied natural gas (LNG) is also
under consideration.

SSGC Progress as on June 1996

Transmission Pipeline, KM 2,470

Distribution Mains, KM 13,800
Distribution Service Lines, KM 3,700
Number of New Gas Connections 1,178,094
Gas Compression Capacity, HP 62,600
COPYRIGHT 1996 Economic and Industrial Publications
COPYRIGHT 2008 Gale, Cengage Learning

Javed Hassan "Natural gas industry of Pakistan". Economic Review.

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