BOL Exclusive: SSGC plans to import 16,500 tonnes LPG to meet winter demand

KARACHI: The Sui Southern Gas Company (SSGC) will import at least 11 consignments of liquefied petroleum gas (LPG) of 1,500 tonnes each with the delivery windows ranging from September to December 2021, official documents revealed on Thursday.

The gas utility supplies synthetic natural gas (SNG) during the high demand as an alternative to piped gas. SSGC issued 11 tenders to procure at least 16,500 tonnes LPG with the option to double or triple the procurement.

“Sealed quotations are invited for [the] supply of imported LPG locally available in parcel size up to 1,500 (MT). [The] company has the right to procure one or more parcels against each tender inquiry,” the tender documents noted.

The Sui Southern Gas Company has set up LPG-air mix plants in remote areas of Sindh and Balochistan where conventional pipelines cannot be laid. The liquefied petroleum gas is mixed with air to produce synthetic gas for onward supply to the consumers through distribution networks like natural gas.

An industry official said the LPG demand increased in the winter because of the shortage of natural gas. Every winter natural gas is hardly available in most parts of the country, which pushes up LPG demand.

The current size of the LPG market is around 1.06 million tonnes/annum. In 2019/20, the commodity’s production stood at 784,200 million tonnes against the target of 820,000 million tonnes and the import remained 272,018 million tonnes against the target of 300,000 million tonnes.

Currently, as many as 11 LPG producers and 200 LPG marketing companies’ are operating in the country, with more than 7,000 authorised LPG distributors.

The government is finalising the liquefied petroleum gas Production and Distribution Policy, 2021, aimed at encouraging the long-term investment and business plans in the sector.

However, Pakistan LPG Marketers Association (PLPGMA) has expressed concerns over the policy, as the primary stakeholders were not taken onboard.

In a letter written to the Oil and Gas Regulatory Authority (Ogra) last month, PLPGMA chairman Farooq Iftikhar said that the Ministry of Energy hastily and surreptitiously drafted the LPG Policy, which had not been circulated to any LPG marketing company for their feedback or comments.

“The disparity in taxation between [the] imported and indigenous LPG is to continue with added incentive to imports by removal of advance income tax, at [the] import stage, and any vessel arriving in the country, which is unable to discharge its cargo, be allowed to be re-export; thus, legitimising sale of Iranian product from Pakistan, are a matter of deep concern for the stakeholders,” he added.

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