ISLAMABAD – Gas shortage in Sindh echoed in a NA panel meeting as provincial representatives said that despite producing surplus gas, the province is not getting its required share, as it is being diverted to other provinces in violation of constitutional provisions.
“Pakistan will renegotiate the long-term LNG supply agreement with Qatar, as under a provision of the treaty after 10 years the treaty can be terminated by the ratifying country,” Federal Minister for Petroleum Division Musadiq Malik said while talking in the NA Standing Committee on Energy.
The NA Standing Committee on Energy (Petroleum Division), which met on Thursday under the chairmanship of Syed Mustafa Mehmood, discussed longstanding grievances, particularly from Sindh and Balochistan, over inequitable gas allocation and the need for constitutional amendments to address these issues, gas procurement agreements with Qatar and Azerbaijan, challenges faced by local gas distribution companies, and the government’s new policy framework for private companies’ involvement in natural gas exploration.
A heated debate over the distribution of natural gas resources among Pakistan’s provinces dominated the committee proceeding. Federal Minister for Petroleum Musadik Malik acknowledged that resource distribution among provinces has been a contentious issue since the country’s inception. “The distribution of resources has always been this way, even before my tenure,” Malik said. He emphasized that gas allocation to Sindh and Punjab is being carried out in accordance with the Constitution, but admitted that Sindh is not receiving its fair share of gas.
Sindh’s representatives, including Syed Naveed Qamar, expressed frustration over the current system. “If this is how it’s going to be, then the Constitution should be amended,” Qamar said. He argued that gas from Sindh, which faces a shortage, is being diverted to other provinces, violating constitutional provisions that prioritize gas allocation to areas with shortages. “The Constitution states that gas should first be given to the province facing a shortage,” Qamar added.
The secretary of Petroleum revealed that 80 per cent of Sindh’s industry relies on local gas, compared to only 20 per cent in Punjab. Despite this, gas from Sindh is being supplied to Balochistan, where recovery rates are low. “Why is gas from one province being sent to another where recoveries are minimal?” questioned the committee chairman. Balochistan’s gas woes were also a focal point. Officials from Sui Southern Gas Company (SSGC) stated that Balochistan’s gas losses are as high as 50 per cent, but gas is still being supplied to the province despite low recoveries. The Balochistan High Court has ruled that consumers in the province cannot be billed more than a certain limit, a decision that has been challenged in court. “We are complying with court’s orders,” Malik said, adding that responsibility for Balochistan’s gas losses should also lie with provincial high court.
Committee member Moin Amir Pirzada criticized the federal government for not addressing Balochistan’s gas theft issues. “Gas theft in Balochistan is rampant, and it’s difficult to control,” Pirzada said. He called for a separate gas management company to be established for the province, emphasizing that “Pakistan’s future lies in Balochistan.” Malik highlighted efforts to curb gas theft, noting that Sui Northern Gas Pipelines Limited (SNGPL) has reduced its losses significantly. “For the first time in the country’s history, a gas company’s losses have decreased to such an extent,” he said. However, he admitted that out of 17 percent of the country’s gas supply to Balochistan, maintaining gas pressure in Balochistan remains a challenge, with losses reaching 17 per cent of total supply.
The secretary, Ministry of Energy provided detailed briefing on gas procurement agreements with Qatar and Azerbaijan, challenges faced by local gas distribution companies, and the government’s new policy framework for private companies’ involvement in natural gas exploration. He highlighted the provision allowing private entities to retain and market 35% of future gas discoveries in Pakistan. The secretary also briefed regarding the two-pronged strategy to manage supply shortfalls, including engaging stakeholders for new discoveries and prudent network operations, which will help optimize reserves, promote competition, and reduce circular debt.
The meeting also addressed the need for upgrading the country’s refineries, which are not compliant with Euro-V standards. Malik revealed that a $5.0 billion investment is required for refinery upgrades and that a biofuel policy has been prepared and will soon be presented to the cabinet. “We will approve and present the biofuel policy within a month,” he said. On the international front, Malik briefed the committee on Pakistan’s liquefied natural gas (LNG) agreements with Qatar and Azerbaijan. He noted that Qatar’s 13.37% agreement is more expensive, while Azerbaijan’s contract is on a take-and-pay basis, allowing flexibility in cargo purchases. “If the power sector does not take LNG, there is a risk of pipeline bursts,” warned the managing director of SNGPL. Minister said that power sector does not buy Rs3,600/MMBTu gas.
The discussion also touched on the controversial practice of diverting gas from Karachi’s industry to Quetta during winter. “In winter, gas from Karachi’s industry is cut off and supplied to Quetta,” the Petroleum Secretary said, adding that Sindh’s gas production currently exceeds Balochistan’s. Qamar questioned the legality of such practices, asking, “Does the government have the authority to violate the Constitution? How can you take gas from one province and give it to another?” Malik responded by asserting that all actions are taken within constitutional limits. “We are all bound by the Constitution,” he said. The Committee unanimously agreed to constitute a subcommittee under the convenorship of Syed Naveed Qamar to draft new guidelines for the efficient use of CSR, production bonuses, and training funds for capacity building. Regarding fuel quality, the ministry stated that refineries have previously been advised to investigate the influence of additives on the environment and health, and the government has established the Brownfield Refining Policy, 2023, to upgrade refineries. The Committee recommended holding a comprehensive briefing on the new biofuel policy in the upcoming meeting.
