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Aftab Maken
KARACHI: Sui Southern Gas Company (SSGC), a pivotal player in Pakistan’s energy sector, is facing severe criticism as its ambitious business plan for FY 2024-27 appears to be significantly derailed by pervasive operational delays, questionable accounting practices, and a troubling lack of strategic foresight.
A recent internal assessment reveals a company struggling to execute critical infrastructure projects, reign in rampant Unaccounted-for Gas (UFG) losses, and embrace much-needed technological advancements, all while operating under a cloud of regulatory and financial uncertainty. The grim outlook raises serious concerns about the nation’s gas supply reliability, particularly as peak demand periods loom, says an official report of the finance ministry.
At the heart of SSGC’s operational woes are glaring delays in its transmission network upgrades. The crucial rerouting of 24-inch and 12-inch pipelines from Bibi Nani Bridge, a project vital for mitigating operational risk, stands at a dismal 40 percent completion. Key milestones like material procurement and site surveys are reportedly stalled, awaiting long-overdue approvals from the National Highway Authority (NHA). Such protracted delays in high-pressure pipeline projects are not merely setbacks; they represent a ticking time bomb, escalating the potential for catastrophic pipeline integrity failures, safety incidents, and forced outages. These, in turn, threaten to trigger widespread gas supply disruptions and incur hefty regulatory penalties under OGRA’s performance benchmarks.
Even more alarming is the meager 22 percent progress reported for the compressor installation at HQ-Sibi. Compressor stations are the lifeblood of a gas transmission system, indispensable for maintaining adequate gas pressure, flow rates, and delivery volumes across vast distances. This installation’s significant delay directly cripples SSGC’s throughput capability and heightens the risk of pressure drops below minimum operating levels, especially during periods of high demand. The current status, with only “PO placement with Solar and preliminary designs” achieved, is woefully inadequate given the project’s long lead time and complex commissioning requirements. Experts are urging SSGC to adopt a critical path methodology to fast-track this project, asserting that system reliability hinges on its timely completion.
While SSGC’s aggressive rehabilitation program, targeting 7,500 km of its distribution network (15 percent of its entire system), is conceptually sound given its aging assets, the pace of execution remains a concern. Although 48 percent progress with 1,200 km completed in FY 2024-25 is noted, a failure to sustain or accelerate this rate risks compounding leakage issues, exacerbating UFG, and leading to widespread asset failures. The continued reliance on decades-old steel pipelines underscores the urgent need for a more comprehensive integration of pipeline integrity management (PIM) techniques, including GIS mapping, smart pigging, and cathodic protection, into the rehabilitation phase.
The company’s UFG management, despite claims of a 40 BCF volumetric reduction since FY 2018-19, remains problematic. The sustained UFG level of 31 BCF (10.5 percent) significantly exceeds international and OGRA benchmarks. Furthermore, the reliance on an “Energy Imbalance Claim of ~6 BCF under the MFR petition,” even if granted, is deemed a temporary fix rather than a structural solution. UFG, encompassing physical leaks, measurement inaccuracies, theft, and billing inefficiencies, demands a more granular approach. Recommendations include bifurcating UFG into technical and non-technical losses for better risk mapping and integrating ultrasonic flow metering technologies to enhance measurement accuracy.
Technological upgrades, though diverse in their scope, are severely hampered by execution lags. Projects like TBS automation, mobile ethane-based leak detection, and automatic fire extinguishing systems, while conceptually robust, show minimal material progress. A disturbing dependence on foreign OEMs for technology demonstrations highlights a profound weakness in local capacity for innovation and adaptation. The delayed deployment of mobile leak detection systems, crucial for tackling localized UFG hotspots, threatens to undermine broader UFG reduction targets. The absence of a clear “Technology Integration Roadmap” with fixed milestones and contractual delivery obligations is identified as a major risk factor for these R&D initiatives.
The commendable step towards GIS infrastructure enhancement, with migration from Oracle 11g to 19c, is laudable for its increased processing capability. However, the slow progress in land records integration (34 percent) and project planning components (17 percent) poses a significant risk of the GIS remaining underutilized. This failure to fully digitize transmission corridors leaves SSGC vulnerable to right-of-way (RoW) disputes, encroachments, and untracked pipeline stretches, ultimately jeopardizing future expansion projects and compliance with environmental and safety standards.
A critical technical weakness has been exposed in SSGC’s billing and metering strategy, specifically the Automated Meter Reading (AMR) pilot. While AMR is vital for reducing manual errors, deterring theft, and enabling dynamic tariff structures, SSGC is urged to adopt a hybrid model. This involves procuring proven international AMR systems for large commercial and industrial customers while concurrently developing phased local solutions for residential segments.
