KE and Sui Southern to Ink Gas Sales Agreement to Resolve Payment Issues
Posted by RAJA KAMRAN
Good news for Karachites as Karachi Electric (KE) and Sui Southern Gas Company (SSGC) have agreed to ink a Gas Sales Agreement (GSA) and resolve the long-standing payment disputes. Due to a dispute between the two energy companies, the people of Karachi faced severe load-shedding during the past few weeks.
KE spokesperson confirmed that electric utility company has taken a step back to resolve the issue of gas supply for its 500 MW power plant.
“We agreed on some issues for the betterment of the city as KE is still waiting for gas pressure to increase,” the spokesperson told.
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Both companies have agreed on the following points.
- KE will deposit Rs 6 billion as a security guarantee to SSGC as the first step of GSA.
- KE and SSGC will ink the GSA as soon as possible.
- For long-standing dues, an auditor will be hired under mutually agreed Terms of Reference.
A source from SSGC confirmed the aforementioned agreement points but said that so far it is mutually agreed but nothing is in writing so far.
“Currently SSGC has no extra gas to supply KE. With gas load management SSGC will able to provide additional gas to KE,” the source told ProPakistani.
The source also told that LNG is a long-term project and some technical issues are involved so SSGC cannot offer it to KE so far. However, it might be possible in the future.
“Gas supply from local gas fields is depleting. As per government policy, the first priority is the domestic gas consumer,” the source told.
In light of this development, Chief Minister Sindh Syed Murad Ali Shah wrote a letter to Prime Minister Shahid Khaqan Abbasi. In his letter, CM Sindh asked to immediately increase the gas supply to KE.
“In larger public interest, the PM intervened in the matter and asked KE and SSGC to resolve the issue as soon as possible and restore gas supply up to 190 mmcfd,” the CM confirmed.
In his letter, CM Sindh said that both companies have shown flexibility to resolve the issue but electricity crisis persists. SSGC has agreed to increased gas supply after KE pays Rs. 6 billion as a security deposit.
“Electric crisis is worst in the city as people are facing 10 hours of load shedding in a day. This disturbs the commercial and industrial activities of the city,” the letter stated.
This is CM Sindh’s second letter to the PM, on the topic of power shortage in Karachi city, in less than a week.
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