UEP’s gas: ECC to allow allocation to SSGCL


ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet is to allow allocation of United Energy Pakistan’s (UEP’s) 35 mmcfd gas to Mohar Field to Sui Southern Gas Company Limited (SSGCL), well-informed sources told Business Recorder.

Mohar Field is located in Latif Block, district Khairpur, Sindh province and the field is being operated by United Energy Pakistan (UEP) Beta GmbH with working interest of 33.40% along with Pakistan Petroleum Limited (33.30%) and Prime Pakistan (M) Limited (33.30%).

As per the provisions of Petroleum Policy and Petroleum Concession Agreement (PCA) signed between government and the gas producer/seller/E&P company), upon the discovery of gas, the gas producer may request the government to purchase share of pipeline specification gas through a nominated buyer which is effectively controlled by the government.

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There are two government nominated buyer companies to whom gas is normally allocated i.e., Sui Southern Gas Company Limited (SSGCL) and Sui Northern Gas Pipelines Limited (SNGPL).

Upon allocation, the terms of the gas sale and purchase are agreed/negotiated between seller and buyer under Gas Sale and Purchase Agreement (GSPA). The price of gas is charged as per the government approved applicable Petroleum Policy to the concession where discovery has been made.

As per practice, the gas discoveries in the province of Sindh and Balochistan are allocated to SSGCL whereas the gas discoveries in the province of Punjab and Khyber Pakhtunkhwa are allocated to Sui Northern Gas Pipeline Limited (SNGPL).

The ECC, in its decision on October 6, 2009 allowed Petroleum Division to allocate Extended Well Testing (EWT) gas to either of the Gas Utility Company on merit. Based on this authorisation and considering the request of the gas producer, Petroleum Division allocates gas to SSGCL and SNGPL during EWT.

Earlier, up to 35 mmcfd gas from UEP’s Mohar discovery under EWT was allocated to SSGCL. The gas supply under EWT entails quality discount of 5% on specification gas and 10% on off-specification gas.

The regulator oil/gas Exploration & Production (E&P) sector i.e., Directorate General ofPetroleum Concessions/Petroleum Division while considering the request of UEP approved the Declaration of Commerciality(DOC), Field Development Plan (FDP) and granted Development and Production Lease (D&PL) over Mohar Field from October 11, 2022 for a period of seven years.

Since the production of gas from Mohar Field has now been converted from EWT to commercial phase, therefore, the producer has requested for formal allocation of the gas to SSGCL.

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