
The federal government has announced new policy rules that allow the state-owned gas companies to process all new domestic connections at tariffs under imported re-gasified liquefied natural gas (RLNG).
This follows the federal cabinet's decision, passed on September 10, to partially lift the ban on new gas connections.
What's new in gas connection policy?
A notification issued by the Ministry of Energy clarifies that this new policy will be applied to both Sui Northern Gas Pipelines Ltd (SNGPL) and Sui Southern Gas Company (SSGC).
All previously pending applications for connections to domestic gas have been completely terminated.
For gas connection applicants who have already made payments on a trend fee or received a demand note, they will be moved to RLNG supply connections after submitting an affidavit stating their acceptance of LNG supply, rather than system gas.
Under the policy guidelines, RLNG will be connected to urgent connections within a maximum of three months. RLNG connections under "urgent fees" will be undertaken up to 50% of their annual connections.
Moreover, a separate merit list will be maintained for bulk and/or special domestic users. All consumers that have had their gas supply disconnected for greater than one year will also be processed onto RLNGs.
While current system gas consumers will still receive supply for the time being, officials stated that they will soon be affected by tariff changes too.
The Ministry of Energy has directed SNGPL and SSGC to immediately issue a new application format and demand notice for RLNG connections, while also ceasing requests for the previous format.
This decision comes at a time when OGRA has accepted that LNG prices are nearly 65% above domestic natural gas.
It also comes on the heels of concerns raised by Petroleum Minister Ali Pervez Malik that a substantial amount of imported LNG for power plants was not being discharged after the Power Division stopped lifting it.