The News reported that Sui Northern Gas Pipelines Limited has once again stopped gas supply to Engro Corporation’s new fertilizer plant as the country faces tough choice to share scarce gas resources between various industries.

A senior official of the Sui Northern Gas Pipelines Limited said that the 1.3 million tonnes per annum fertilizer plant was stopped supply last Thursday as part of a scheme to meet the needs of the power plants. It is a difficult situation for all of us. Power plants, textile companies, fertilizer makers and domestic consumers all need gas. It is hard choice for the country.

Engro announced start of commercial operations of its USD 1.1 billion urea plant last month. Since, the government has committed to supply a fixed quantity of gas for 20 years any disruption in supply results in rise in urea price to meet revenue losses.

As per the agreement, the new plant is entitled to 100 million cubic feet per day of gas. But it is receiving only 80% of that. For most the months since its inauguration in January, the plant remained shut.

SNPGL officials said that the supply to Engro was conditional upon increase in production from Qadirpur Gas Field which is operated by the Oil and Gas Company Limited. We were supposed to supply 100 MMCFD to Engro when the field produced 600 MMCFD. It is producing just 380 MMCFD.

Pakistan’s urea demand is approximately 6.2 million tonnes against the local production of 5.2 million tonnes. The government spends an average of USD 500 million on import of urea every year and then subsidizes it to keep the prices at par.

(Sourced from www.thenews.com.pk)