TEAM J SYNOPSIS OF DESK RESEARCH

GAS DISTRIBUTION:
Distribution is the final step in delivering natural gas to customers. While some large industrial, commercial, and electric generation customers receive natural gas directly from high capacity interstate and intrastate pipelines (usually contracted through natural gas marketing companies), most other users receive natural gas from their local gas utility, also called a local distribution company (LDC). LDCs are regulated utilities involved in the delivery of natural gas to consumers within a specific geographic area. There are two basic types of natural gas utilities: those owned by investors, and public gas systems owned by local governments. Distribution and Safety: Local distribution companies, maintain the highest safety standards to ensure that preventable accidents are avoided, and problems with the distribution network are remedied in a timely fashion. Many of the safety programs maintained by utilities are quite similar to those of interstate pipeline companies. Safety measures at the local level include: Leak Detection Equipment: Utilities have in place sophisticated leak detection equipment, designed to pick up on leaks of natural gas from the distribution network. Utilities also add odorants to the natural gas to make it easier to detect a leak. Safety Education Programs: Utilities typically run natural gas safety seminars in schools, community centers, and through other organizations to ensure customers are well versed in natural gas safety procedures and know what to do in the event of a leak or emergency. Technicians on Call: Utilities maintain fleets of technicians on call 24 hours a day, seven days a week to respond to customers' problems and concerns. Emergency Preparedness: Utilities participate in community and local emergency preparedness programs, educating and preparing for emergency events such as natural disasters. One Call Systems: Provides customers, contractors, and excavators with a single phone number to call before commencing excavation or construction, to ensure that the pipelines, and other buried facilities are not damaged.

OPPORTUNITIES: E&P companies under Petroleum Exploration & Production Policy 2009 are allowed to contract with Natural Gas transmission and distribution companies

and third parties, other than residential and commercial consumers, for the sale of their share of Natural Gas in Pakistan at negotiated prices in accordance with applicable laws, rules and regulations. Subject to overall market demand, E&P Companies may request and GOP will purchase their share of pipeline specification gas through a nominated buyer which is effectively controlled by it in acceptable daily, monthly and yearly volumes to meet the internal demand in an economical manner provided there are no infrastructure constraints. The delivery point shall be at the field gate. GOP/gas buyer nominated by GOP shall pay the price for gas at the field gate as set out in this Policy. SSGCL transmission system extends from Sui in Baluchistan to Karachi in Sindh comprising over 3,220 KM of high pressure pipeline ranging from 12 - 24" in diameter. The distribution activities covering over 1200 towns in the Sindh and Baluchistan are organized through its regional offices. An average of about 388,828 million cubic feet (MMCFD) gas was sold in 2009-2010 to over 2.2 million industrial, commercial and domestic consumers in these regions through a distribution network of over 37,000 Km. SSGCL also owns and operates the only gas meter manufacturing plant in the country, having an annual production capacity of over 750,000 meters. SSGC has an authorized capital of Rs. 10 billion of which Rs 6.7 billion is issued and fully paid up. The Government owns the majority of the shares which is presently over 70%. Oil & Gas are two of the major components of Pakistan's Energy Mix contributing more than 85% to the total fuel share of energy production. Serving to the aggregate requirement of over 400,000 barrels of oil per day, 38% of the total supplies to the country's energy mix is met through imported oil. After substantial completion of expansion program under GIREP-I, SSGC has embarked upon the execution of Gas Infrastructure and Rehabilitation Expansion Programme-II as apart of its five year core investment programme to provide the requisite infrastructural capability and reliability commensurate with the anticipated expansion needs of its franchise area through effective utilization of the indigenous gas resources including Sawan/Miano and additional gas from Bhit and ZamZama and the expected availability from fields located in the blocks of Zarghun , Khipro and Sanjhoro. In the 5 years from 2004-05 SSGC is going to spend estimated Rs 12 billion on GIREP-II & QPCEP-III with the normal expansion of gas transmission and distribution system involving the extension of transmission & distribution network by around 700 Kilometers excluding the project still at conceptual stage. With the above mentioned expenditure SSGC will be able to transmit about 365 MMscfd additional gas and the total transmission capacity is expected to enhance to 1650 MMscfd gas in 2008-09.

Pakistan started Compressed Natural Gas (CNG) as a transport fuel programme through establishment of research and demonstration CNG refueling stations by Hydrocarbon Development Institute of Pakistan (HDIP) at Karachi in 1982 and at Islamabad 1989. CNG is now fast emerging as an acceptable vehicular fuel in place of oil. Pakistan is the largest user of CNG in the world. Large diesel vehicles (buses and trucks) being the major consumer of HSD are now next target for substitution by CNG for economic and environmental reasons. The government is encouraging industry to shift from imported fuel oil to natural gas in power generation with anticipated savings of US $400 to 500 million. Use of compressed natural gas (CNG) is being encouraged in the transport sector. More than 240 CNG stations are operational in the country, meeting the requirements of about 200,000 vehicles, and it is expected that by June of 2003, more than 350 stations will be operational to further reduce the burden of imported fuel. Availability of liquid petroleum gas (LPG) has been increased, and its use as domestic fuel in rural areas is being encouraged to conserve forest and wood resources. Accordingly, gas consumption is expected to grow from about 2.5 billion cubic feet per day (BFCD) in 2002 to 5 BCFD in 2012. Natural gas, as the name implies, is found in gaseous form naturally, underground at varying depths and geographical formations. It is one of the most abundant energy sources in Pakistan, and because it is produced domestically, it is not subject to foreign disruptions of price or supply. Comprised primarily of methane, natural gas is odorless and colorless when it comes out of the ground. After impurities are removed, the natural gas is introduced into the pipeline system where it is transported to the consumers. Prior to distribution, a harmless odorant is added to the gas so any leakage can be easily detected before an unsafe situation occurs. In addition to this "rotten egg" odor, natural gas has some built-in safety features. It is lighter than air, so it will rise and dissipate into the atmosphere in the event of a leak. And it has a very narrow combustion range, igniting only when mixed with air at a ratio of between 4 and 14 percent. Any mixture higher or lower than that range and natural gas simply won't burn. It also requires a very high degree of heat, at least 1200 degrees Fahrenheit, before it will ignite. Once combustion occurs, natural gas is one of the cleanest-burning fuels available today. When it is burned properly, the only emissions are carbon dioxide (which is what we exhale when we breathe) and water vapor. Because of its clean-burning properties, natural gas has become the environmental fuel of choice for many residential, commercial and industrial applications. Such applications include: space heating, water heating, cooking, and as a fuel for fireplaces, vehicles, power plants, commercial and industrial boilers, as well as commercial and industrial processing. SNGPL got 3rd, 4th and 5th CSR National Excellence Award in 2008, 2009 and

in 2010 and also got 7th Annual Environment Excellence Award 2010.
As Russia and China vie with each other to win the construction contract for the IranPakistan gas pipeline project, Pakistan is expected to finalize an engineering and procurement deal with Beijing, which may also provide financing in line with the growing energy cooperation between the two sides. It will good for gas sector.

The conceptual study of Project-IX is underway to carry maximum gas beyond Multan , to facilitate gas consumers from all walks of life in central Punjab and Northern areas of the country. The basic intent of Project-IX is the elimination of bottle necks in SNGPLs existing transmission network and to transport gas to independent Power Plants in Punjab province, through system up-gradation with loop lines and system compression enhancement, beside construction of pipelines to absorb additional gas available from gas sources of Potohar region and newly discovered Gurguri-Makori field in Karak District of Khyber Pakhtoon Khwa province. RECENTLY COMPLETED PROJECTS:
SR.NO. ACTIVITY DIA (INCH) LENGTH (KM) COMMISSIO NED ON

1 2

D.G Cement Line (Dera Ghazi Khan) Shakardara- Lachi Line

8 8

26 25.5 51.5

03/01/06 06/08/05 314.00

TOTAL Budgeted Cost (Million Rs.)

THREATS:
SNGPL newly-appointed MD Arif Hameed has said that countrys industry is in critical situation and all gas matters will be resolved soon so that hurdle in the way of economic activities could be removed. He said this while addressing to the delegation of business community led by Mian Muhammad Tariq Shafi, Regional Chairman FPCCI in a meeting here at SNGPL House, says a press release. SNGPL has intention to boost up the economic activities at all hut the department is facing severe shortage of gas. Muhammad Tariq Shafi Regional Chairman FPCCI said that the productivity process and other economic development are being hampered by this energy crisis which also caused to increase the unemployment and inflation. He said business community is being compelled to shift their businesses. Pakistan has big reservations of minerals and workforce but unfortunately no vision is being observed in this worst condition of economy. BOMB THREATS PANICS:

LAHORE: A bomb hoax raised panic among Sui Northern Gas Pipelines (SNGPL) officials when an unidentified man told them about a bomb in the SNGPL building on Kashmir Road, around 200 yards away from Governors House. Around 1,400 SNGPL officials and more than 500 visitors vacated the building immediately. SNGPL officials said that an unidentified man called them around 10:30am and said that a bomb had been planted in the building, which would explode within the next few minutes. The Bomb Disposal Squad (BDS) and law enforcement agencies searched the building, but found nothing. Police sources said that the caller could not be traced because the building did not have a call identification system. SNGPL compromises with APTMA on gas load shedding. Baloch insurgents have intensified their attacks on vital gas pipelines and power transmission pylons in recent days, depriving the entire province of power and gas facilities for days and causing losses worth over Rs100 million to the Sui Southern Gas Company (SSGC).if these things happens again ans again then it will very difficult for SSGC to servive. The IRAN pipeline is also a threatened project due to extreme pressure from the US on Pakistan as well as India not to go through with the project. Gas supply is decreasing from last winter and different industries , CNG stations, power grid stations and houses had to face gas load shedding. The Sui Southern Gas Company Limited (SSGC) is taking concrete steps to overcome the issue of gas losses amounting to 50 percent. As part of such efforts, the company with the assistance of a $200 million loan from the World Bank, SSGC intends to implement a project named Natural Gas Efficiency Project for the main purpose of reducing system losses and the rising tide of UFG. Presently the SSGC is suffering line losses of about 400 mmcfd gas, having potential to generate 2000 MW of electricity. 50 percent of the losses are due to leakages while the rest can be attributed to slow meters, theft and measurement errors. If the situation continues to persist, the current 8 percent unaccounted for gas (UFG), the company is faced with, will rise to 11 percent by 2016. Understand and respond to their competitors' business structure and strategies, and capitalize on their weaknesses. Stay up to date on the major developments affecting the company.