ISLAMABAD, 23 July 2025 — The Petroleum Division is grappling with a mounting crisis as power plants significantly reduce their off-take of Regasified Liquefied Natural Gas (RLNG), pushing the Sui Northern Gas Pipelines Limited (SNGPL) system to dangerously high pressure levels.
According to Deputy Director (Tech Gas) Salahuddin Khan, the power sector’s RLNG consumption has fallen far below its committed demand of 600 MMCFD for July 2025. On July 16, the actual consumption stood at just 327 MMCFD, with a monthly average of 501 MMCFD. The situation worsened on July 17, when consumption dropped further to 300 MMCFD.
In a letter dated July 15, 2025, SNGPL warned that surplus RLNG is accumulating in the system, creating operational risks at re-gasification terminals. “If the off-take is not increased urgently, it could disrupt cargo discharge, trigger demurrages, or activate take-or-pay clauses,” warned the Directorate General (Gas).
To avoid curtailment of local gas supplies and protect system integrity, the Petroleum Division has urged the Power Division to direct IPPs to recoup unconsumed RLNG volumes and meet monthly demand targets.
However, Power Minister Sardar Awais Ahmad Khan Leghari defended the low RLNG usage, citing adherence to the Economic Merit Order (EMO), which mandates dispatch of the cheapest power sources first. “If RLNG plants fall outside the merit, they cannot be run,” he asserted, suggesting the Petroleum Division revisit LNG procurement contracts if they are proving financially unviable.
Leghari also referenced the Power Division’s own renegotiation with IPPs, hinting the gas sector should follow suit.
Meanwhile, NEPRA has expressed concern over EMO violations and has instructed the National Grid Company (NGC) to present a detailed update on system constraints, economic outages, and the financial implications of out-of-merit generation. Although earlier scrutiny by NEPRA led to withheld payments, recent oversight has dwindled without explanation.
A high-level gas sector meeting underscored the urgency of aligning RLNG supply with power sector demand. Secretary Petroleum identified three priority issues: tariff rationalisation for indigenous and imported gas, synchronisation of gas supply with actual power demand, and resolution of circular debt in the gas sector.
As system pressures grow and financial risks escalate, the standoff between the Petroleum and Power Divisions highlights deeper structural misalignments that must be urgently addressed to prevent disruption and ensure sectoral sustainability.
Story by Mushtaq Ghumman
